Document and Entity Information
Document and Entity Information - USD ($) | 9 Months Ended | ||
Jun. 30, 2017 | Aug. 17, 2017 | Jan. 17, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Financial Gravity Companies, Inc. | ||
Entity Central Index Key | 1,377,167 | ||
Document Type | S1 | ||
Document Period End Date | Jun. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 43,578,625 | ||
Entity Common Stock, Shares Outstanding | 35,367,900 | ||
Document Fiscal Period Focus | Q2 | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 154,468 | $ 132,803 | $ 801,542 |
Trade accounts receivable | 145,828 | 78,843 | 40,948 |
Accounts receivable - related party | 4,506 | 4,506 | 29,326 |
Prepaid expenses | 58,963 | 32,239 | 16,103 |
Total current assets | 363,765 | 248,391 | 887,919 |
OTHER ASSETS | |||
Property and equipment, net | 132,389 | 141,080 | 6,639 |
Investment | 0 | 10,000 | 0 |
Customer relationships, net | 25,256 | 33,675 | 0 |
Proprietary content, net | 410,235 | 459,463 | 0 |
Trade name | 69,300 | 69,300 | 0 |
Non-compete agreements, net | 17,095 | 21,040 | 0 |
Deposits | 0 | 50,000 | |
Trademarks | 22,642 | 22,592 | 20,174 |
Goodwill | 1,094,702 | 1,094,702 | 662,967 |
Total assets | 2,135,384 | 2,100,243 | 1,627,699 |
CURRENT LIABILITIES | |||
Accounts payable - trade | 31,432 | 27,229 | 82,703 |
Accounts payable - related party | 0 | 2,300 | |
Accrued expenses | 131,032 | 103,654 | 46,400 |
Deferred revenue | 62,887 | 32,739 | 0 |
Line of credit | 18,481 | 19,732 | 0 |
Notes payable | 132,408 | 93,397 | 0 |
Pre-merger payables | 18,846 | 99,056 | 0 |
Total current liabilities | 395,086 | 375,807 | 131,403 |
STOCKHOLDERS' EQUITY | |||
Common stock - 300,000,000 shares authorized; $0.001 par value | 35,538 | 34,863 | 28,389 |
Additional paid-in capital | 5,504,285 | 4,768,596 | 2,411,791 |
Accumulated deficit | (3,799,525) | (3,079,023) | (943,884) |
Total stockholders' equity | 1,740,298 | 1,724,436 | 1,496,296 |
Liabilities and Stockholders Equity | $ 2,135,384 | $ 2,100,243 | $ 1,627,699 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Statement of Financial Position [Abstract] | |||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 |
Common stock par value | $ 0.001 | $ .001 | $ .001 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUE | ||||||
Investment management fees | $ 277,519 | $ 229,949 | $ 913,022 | $ 684,653 | $ 920,813 | $ 747,869 |
Service income | 540,400 | 450,032 | 1,601,560 | 1,205,384 | 1,750,613 | 547,806 |
Commissions | 0 | 10,043 | 41,031 | 34,073 | 69,073 | 8,126 |
Rental income | 1,500 | 5,000 | 4,500 | 11,400 | 16,500 | 6,000 |
Total revenue | 819,419 | 695,024 | 2,560,113 | 1,935,511 | 2,756,999 | 1,309,801 |
OPERATING EXPENSES | ||||||
Cost of services | 11,919 | 18,155 | 52,883 | 55,522 | 75,378 | 76,828 |
Professional services | 324,296 | 238,248 | 953,947 | 871,696 | 1,237,221 | 452,148 |
Depreciation and amortization | 24,947 | 38,127 | 74,391 | 115,420 | 153,547 | 289 |
Impairment of goodwill | 662,967 | 0 | ||||
General and administrative | 107,669 | 106,845 | 384,477 | 291,263 | 408,537 | 411,235 |
Management fees - related party | 50,000 | 50,000 | 153,000 | 163,333 | 213,333 | 155,657 |
Marketing | 131,508 | 106,922 | 307,977 | 298,385 | 402,402 | 232,904 |
Salaries and wages | 530,125 | 476,877 | 1,311,554 | 1,289,374 | 1,730,278 | 947,132 |
Total operating expenses | 1,180,464 | 1,035,174 | 3,238,229 | 3,084,993 | 4,883,663 | 2,276,193 |
Net operating loss | (361,045) | (340,149) | (678,116) | (1,149,482) | (2,126,664) | (966,392) |
OTHER INCOME (EXPENSE) | ||||||
Other income | 0 | 0 | 191 | 0 | 0 | 27,383 |
Interest expense | (14,246) | (2,035) | (42,577) | (6,558) | (8,475) | (4,875) |
Total other (expense) income | (14,246) | (2,035) | (42,386) | (6,558) | (8,475) | 22,508 |
NET LOSS | $ (375,291) | $ (342,184) | $ (720,502) | $ (1,156,040) | $ (2,135,139) | $ (943,884) |
EARNINGS PER SHARE - Basic and Diluted | $ (0.02) | $ (0.01) | $ (0.02) | $ (0.04) | $ (.07) | $ (.04) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Sep. 30, 2014 | 0 | |||
Beginning balance, value at Sep. 30, 2014 | $ 0 | $ 0 | $ 0 | $ 0 |
Common stock issued, shares | 21,150,000 | |||
Common stock issued, value | $ 21,150 | (20,445) | 705 | |
Common stock issued under a private placement memorandum, shares | 5,625,000 | |||
Common stock issued under a private placement memorandum, value | $ 5,625 | 1,869,375 | 1,875,000 | |
Common stock issued on acquisition, shares | 1,314,477 | |||
Common stock issued on acquisition, value | $ 1,314 | 436,845 | 438,159 | |
Common stock issued to non-employee directors, shares | 300,000 | |||
Common stock issued to non-employee directors, value | $ 300 | 99,700 | 100,000 | |
Gain on acquisitions | 26,316 | 26,316 | ||
Net loss | (943,884) | (943,884) | ||
Ending balance, shares at Sep. 30, 2015 | 28,389,477 | |||
Ending balance, value at Sep. 30, 2015 | $ 28,389 | 2,411,791 | (943,884) | 1,496,296 |
Common stock issued under a private placement memorandum, shares | 785,000 | |||
Common stock issued under a private placement memorandum, value | $ 785 | 534,215 | 535,000 | |
Common stock issued on acquisition, shares | 6,000,000 | |||
Common stock issued on acquisition, value | $ 6,000 | 1,898,620 | 1,904,620 | |
Common stock surrendered by former officer, shares | (2,926,294) | |||
Common stock surrendered by former officer, value | $ (2,926) | 2,926 | ||
Common stock held by Pacific Oil Company (reverse merger), shares | 2,614,717 | |||
Common stock held by Pacific Oil Company (reverse merger), value | $ 2,615 | (101,671) | (99,056) | |
Stock based compensation | 22,715 | 22,715 | ||
Net loss | (2,135,139) | (2,135,139) | ||
Ending balance, shares at Sep. 30, 2016 | 34,862,900 | |||
Ending balance, value at Sep. 30, 2016 | $ 34,863 | $ 4,768,596 | $ (3,079,023) | 1,724,436 |
Net loss | (720,502) | |||
Ending balance, value at Jun. 30, 2017 | $ 1,740,298 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss | $ (720,502) | $ (1,156,040) | $ (2,135,139) | $ (943,884) |
Adjustments to reconcile net loss to net cash used in operating activities | ||||
Depreciation and amortization | 74,391 | 115,420 | 153,547 | 289 |
Impairment of goodwill | 662,967 | 0 | ||
Forfeiture of deposit for failed acquisition | 50,000 | 0 | ||
Write off of fixed assets | 0 | 15,787 | 0 | 15,787 |
Stock based compensation | 22,715 | 100,000 | ||
Stock compensation for services provided by a third party | 50,000 | 0 | ||
Services provided to relieve accounts receivable - other | 0 | (16,430) | ||
Changes in operating assets and liabilities, net of effects of purchase of subsidiaries | ||||
Trade accounts receivable | (66,985) | 43,876 | (22,420) | 57,315 |
Accounts receivable - related party | 0 | 32,194 | 30,228 | (14,254) |
Prepaid expenses | (26,723) | (94,158) | (16,136) | 2,425 |
Accounts payable - trade | 4,203 | (25,226) | (55,474) | 32,560 |
Accounts payable - related party | 0 | (2,300) | (2,300) | (48,700) |
Accrued expenses | 27,377 | (2,435) | (12,230) | (112,056) |
Deferred revenue | 30,148 | 45,967 | 32,739 | 0 |
Pre-merger liabilities | (18,845) | 0 | ||
Net cash used in operating activities | (646,936) | (1,001,559) | (1,291,503) | (910,518) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Gain from the sale of investment | 10,000 | 0 | ||
Payments for purchase of investment | (10,000) | 0 | ||
Cash paid on purchase of property and equipment | (4,109) | (15,572) | (65) | (7,942) |
Cash paid for purchase of subsidiary | 0 | (10,000) | ||
Cash paid for purchase of MDP | 0 | (71,679) | ||
Cash acquired upon acquisition of subsidiaries | 57,025 | 53,190 | ||
Deposit for future acquisition | 0 | 50,000 | 0 | (50,000) |
Purchases of trademarks | (50) | (1,692) | (2,419) | (20,174) |
Net cash provided by investing activities | 5,841 | 22,737 | 44,541 | (96,605) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Borrowings on line of credit | 24,391 | 0 | ||
Payments on line of credit | (1,251) | 20,416 | (900) | (55,000) |
Borrowings on note payable | 100,000 | 0 | 26,086 | 0 |
Payments on note payable | (60,989) | 0 | (6,354) | 0 |
Payments on capital lease obligations | 0 | (12,040) | ||
Proceeds from the sale of common stock | 625,000 | 377,715 | 535,000 | 1,875,705 |
Net cash provided by financing activities | 662,760 | 398,131 | 578,223 | 1,808,665 |
TOTAL INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 21,665 | (580,691) | (668,740) | 801,542 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 132,803 | 801,542 | 801,542 | 0 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 154,468 | 220,851 | 132,803 | 801,542 |
Supplemental disclosures of cash flow information: | ||||
Interest | 40,637 | 2,555 | 5,921 | 4,401 |
Taxes | 0 | 0 | 0 | 0 |
Common stock issued upon acquisition of: | ||||
Cloud9 Holdings Company (Note 9) | 0 | 438,159 | ||
Tax Coach Software, LLC (Note 9) | 1,904,620 | 0 | ||
Net assets (liabilities) assumed for purchase of: | ||||
Cloud9 Holdings Company (Note 9) | 0 | (154,210) | ||
Business Legacy, Inc. and Pollock Advisory Group, Inc. (Note 9) | 0 | 26,316 | ||
Tax Coach Software, LLC (Note 9) | 809,918 | 0 | ||
Payables owed by Pacific Oil Company | (99,056) | 0 | ||
Equity in escrow to offset payables owed by legacy Pacific Oil Company | 99,056 | 0 | ||
Transfer of capital lease obligation to the majority member | $ 0 | $ 17,543 | ||
Common stock issued upon acquisition of: Tax Coach Software, LLC (Note 9) | 0 | 1,904,620 | ||
Net assets (liabilities) assumed for purchase of: Tax Coach Software, LLC (Note 9) | 0 | 809,918 | ||
Settlement of payables owed by legacy Pacific Oil Company Stockholders | $ 61,365 | $ 0 |
Nature of Business
Nature of Business | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nature of Business | Financial Gravity Companies, Inc. and Subsidiaries (“the Company”) is located in Allen, Texas. The wholly-owned subsidiaries of the organization include: Financial Gravity Holdings, Inc., Financial Gravity Operations, Inc., Financial Gravity Tax, Inc., Financial Gravity Wealth, Inc., Cloud9 Holdings Company, Financial Gravity Business, LLC, Financial Gravity Ventures, LLC., SASH Corporation (doing business as Metro Data Processing) and Tax Coach Software, LLC. On September 30, 2016, Financial Gravity Holdings entered into a reverse merger transaction with Pacific Oil Company (the “Merger”). Pacific Oil Company was incorporated in Nevada on December 5, 2005 as Kat Racing, Inc. On January 4, 2013, the Articles of Incorporation were amended to change the name of the Company to Prairie West Oil & Gas, Ltd. On July 26, 2013, the Articles of Incorporation were amended to change the name of the company to Pacific Oil Company. On October 31, 2016, following the Merger, the Articles of Incorporation were amended to change the name of the Company to Financial Gravity Companies, Inc. On the effective date of the Merger, the business of Financial Gravity Holdings became the only business of Pacific Oil Company (currently named Financial Gravity Companies, Inc.). Financial Gravity Holdings is now a subsidiary of the Company. Financial Gravity Holdings, Inc. (“FGH”) was established on September 29, 2014 to engage in the acquisition and integration of financial and other businesses which will deliver a wide range of accounting, tax planning and management services to high net worth individuals and businesses in the Dallas/Fort Worth region, with further expansion into other markets in accordance with its long-term growth rate and strategic business plan. Financial Gravity Operations, Inc. (“FGO”) was established as a wholly-owned subsidiary of FGH in Texas on September 29, 2014. FGO did not have any activity through September 30, 2014. Activity commenced in 2015 for FGO related to the management of operational expenses for the shared services of the subsidiaries. Financial Gravity Business, LLC. (“FGB”) formerly Cloud9b2b, LLC (“Cloud9 B2B”) was acquired by Cloud9 Holdings Company effective December 31, 2014 and provides business consulting services to Small Business Owners that identify ways to leverage a business’ current assets (people, platforms and processes) and reduce exposure to risk, both short-term and long-term, while simplifying the business and increasing profitability. Financial Gravity Ventures, LLC. (“FGV”) formerly Cloud9 Accelerator, LLC was acquired by Cloud9 Holdings Company effective December 31, 2014 and holds acquired companies and business assets until they are integrated into the main stream Financial Gravity business structure. FGV does not have any financial activity through June 30, 2017. Effective January 1, 2015, Cloud9 assigned 100% of the membership interest in Cloud9 Accelerator, LLC and Cloud9b2b, to FGO. Financial Gravity Tax, Inc. (“FG Tax”) formerly Business Legacy, Inc., (“BLI”) was acquired by FGO for no cost effective January 1, 2015 and is located in Allen, Texas. BLI is a bookkeeping, tax planning, tax preparation, and payroll service provider to small companies and individuals. Financial Gravity Wealth, Inc. (“FG Wealth”) formerly Pollock Advisory Group, Inc., (“PAG”) was acquired by FGO for no cost effective January 1, 2015 and is a registered investment advisor, located in Allen, Texas. PAG provides asset management services. SASH Corporation, an Oklahoma corporation doing business as Metro Data Processing (“MDP”) was acquired August 12, 2015. The purchase was made by Cloud9Accelerator, LLC. MDP is located in Tulsa, Oklahoma, and provides payroll services, software, and support solutions to business owners. Tax Coach Software, LLC, an Ohio limited liability company (“TCS”), was acquired effective October 1, 2015. The purchase was made by FGH. Located in Cincinnati, Ohio, TCS provides three primary services including monthly subscriptions to the “Tax Coach” software system, coaching and email marketing services. | Financial Gravity Companies, Inc. and Subsidiaries is located in Allen, Texas. The wholly-owned subsidiaries of the organization include: Financial Gravity Holdings, Inc., Financial Gravity Operations, Inc., Business Legacy, Inc., Pollock Advisory Group, Inc., Cloud9 Holdings Company, Cloud9b2b, LLC, Cloud9 Accelerator, LLC., SASH Corporation (doing business as Metro Data Processing) and Tax Coach Software, LLC. Financial Gravity Holdings, Inc. (“FGH”) was established on September 29, 2014 to engage in the acquisition and integration of financial and other businesses which will deliver a wide range of accounting, tax planning and management services to high net worth individuals and businesses in the Dallas/Fort Worth region, with further expansion into other markets in accordance with its long-term growth rate and strategic business plan. Financial Gravity Operations, Inc. (“FGO”) was established as a wholly-owned subsidiary of FGH in Texas on September 29, 2014. FGO did not have any activity through September 30, 2014. Activity commenced in 2015 for FGO related to the management of operational expenses for the shared services of the subsidiaries. Financial Gravity Business, LLC. (“FGB”) formerly Cloud9b2b, LLC (“Cloud9 B2B”) was acquired by Cloud9 Holdings Company effective December 31, 2014 and provides business consulting services to Small Business Owners that identify ways to leverage a business’ current assets (people, platforms and processes) and reduce exposure to risk, both short-term and long-term, while simplifying the business and increasing profitability. FGB does not have any financial activity through September 30, 2016. Financial Gravity Ventures, LLC. (“FGV”) formerly Cloud9 Accelerator, LLC was acquired by Cloud9 Holdings Company effective December 31, 2014 and holds acquired companies and business assets until they are integrated into the main stream Financial Gravity business structure. FGV does not have any financial activity through September 30, 2016. Effective January 1, 2015, Cloud9 assigned 100% of the membership interest in Cloud9 Accelerator, LLC and Cloud9b2b, to FGO. Financial Gravity Tax, Inc. (“FG Tax”) formerly Business Legacy, Inc., (“BLI”) was acquired by FGO for no cost effective January 1, 2015 and is located in Allen, Texas. BLI is a bookkeeping, tax planning, tax preparation, and payroll service provider to small companies and individuals. Financial Gravity Wealth, Inc. (“FG Wealth”) formerly Pollock Advisory Group, Inc., (“PAG”) was acquired by FGO for no cost effective January 1, 2015 and is a registered investment advisor, located in Allen, Texas. PAG provides asset management services. SASH Corporation, an Oklahoma corporation doing business as Metro Data Processing (“MDP”) was acquired August 12, 2015. The purchase was made by Cloud9Accelerator, LLC. MDP is located in Tulsa, Oklahoma, and provides payroll services, software, and support solutions to business owners. Tax Coach Software, LLC (“TCS”), was acquired effective October 1, 2015, and is an Ohio limited liability company. The purchase was made by FGH. TCS, located in Cincinnati, Ohio, provides three primary services including monthly subscriptions to the “Tax Coach” software system, coaching and email marketing services. |
1. Summary of Significant Accou
1. Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||
1. Summary of Significant Accounting Policies | A summary of the significant accounting polices consistently applied in the preparation of the accompanying consolidated financial statement in accordance with accounting principles generally accepted in the United States of America (“GAAP”) is as follows. Basis of Consolidation The consolidated financial statements include the accounts of FGH, FGO, Cloud9 (from the date of acquisition), including Cloud9b2b and Cloud9 Accelerator, LLC, PAG (from the date of acquisition), BLI (from the date of acquisition), TCS (from the date of acquisition), and MDP (from the date of acquisition), (collectively referred to as “the Company”). All significant intercompany accounts and transactions have been eliminated on consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Trade Accounts Receivable Trade accounts receivable are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are recorded when received. There was no allowance for doubtful accounts recorded as of June 30, 2017 and September 30, 2016. In the normal course of business, the Company may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America. The Company does not believe that it is exposed to any significant risk of loss on accounts receivable. Prepaid Expenses Prepaid expenses consist of expenses the Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time the service has been provided. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives by the straight-line method. Maintenance and repairs are charged to earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded. Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases) are charged to income as incurred. Customer Relationships The customer relationships acquired as part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to such relationships on the date of the purchase (see Note 9). The customer relationships are being amortized on a straight-line basis over a four-year estimated life. During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense of $2,806 and $8,418, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at June 30, 2017 was $19,643 and $11,225 at September 30, 2016. Proprietary Content The proprietary content acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to such content on the date of the purchase (see Note 9). The proprietary content is being amortized on a straight-line basis over an eight-year estimated life. During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense of $16,410 and $49,230, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at June 30, 2017 was $114,866 and $65,637 at September 30, 2016. Trade Name The trade name acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to such name on the date of the purchase (see Note 9). Management has determined that the trade name has an indefinite life and does not consider the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of June 30, 2017. Prospect List The prospect list acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $53,800, the value attributed to such list on the date of the purchase (see Note 9). The prospect list is being amortized on a straight-line basis over a one-year estimated life. During the year ended September 30, 2016, the Company recorded the full amortization expense of $53,800 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 31, 2016 was $53,800. Non-compete Agreements Non-compete agreements entered into as a part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed to such agreements on the date of the purchase (see Note 9). The non-compete agreements are being amortized on a straight-line basis over the five-year term of the non-compete clause of the agreement. During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense of $1,315 and $3,945, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at June 30, 2017 was $9,205 and $5,260 at September 30, 2016. Trademarks The Company accounts for trademarks in accordance with GAAP and accordingly, trademarks are stated at cost. Trademarks with indefinite lives are not amortized but are tested for impairment at least annually. Management has determined that the trademarks have an indefinite life and do not consider the value of trademarks recorded in the accompanying consolidated balance sheet to be impaired as of June 30, 2017. Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a two-step impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than its carrying value. Management does not consider the value of goodwill recorded for TCS in the accompanying consolidated balance sheet to be impaired as of June 30, 2017, and September 30, 2016. However, goodwill attributed to Cloud9 and MDP was deemed to be impaired during the year ended September 30, 2016 as the assumptions for what those entities would be used for at acquisition had significantly changed and the valuation of those entities during the year did not support the goodwill at acquisition. The fair values of the assets acquired and liabilities assumed were determined primarily using the income approach, which determines the fair value for the asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The fair value of relationships was determined by projecting expected cash flows and subtracting the portion of the cash flow derived by the relevant contributory assets. The accompanying consolidated balance sheets, consolidated statements of operations, changes in stockholders’ equity and cash flows include the results of operations of the acquired subsidiaries from the date of acquisition. Income Taxes The Company accounts for Federal and state income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There was no accrued interest or penalties as of June 30, 2017 and September 30, 2016. From time to time, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s Federal returns since 2014 are still subject for examination by taxing authorities. Losses Per Share Basic earnings per common share is computed by dividing net losses available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Average number of common shares were 34,973,013 and 31,990,466 for the three months ended June 30, 2017 and 2016, respectively. Average number of common shares were 35,383,552 and 32,913,403 for the nine months ended June 30, 2017 and 2016, respectively. For the nine months ended June 30, 2017 and 2016, approximately 2,340,171 and 2,200,346 shares of common stock underlying options and warrants, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. Revenue Recognition FG Wealth generates investment management fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage client investments. FG Tax and MDP generate service income from consulting and other professional services performed. Commission revenue is derived from the sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized at the time the policy is issued. Revenue represents gross billings less discounts, and is calculated net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets. Tax Coach Software has 3 types of services that are charged and collected on a month to month subscription basis (Tax Coach basic membership, All-Stars coaching, and Wire Service weekly broadcast email). None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships. Advertising Advertising costs are charged to operations when incurred. Advertising and marketing expense was $131,508 and $106,922 for the three months ended June 30, 2017 and 2016, respectively; and $307,977 and $298,385 for the nine months ended June 30, 2017 and 2016, respectively. Stock-Based Compensation The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk-free rate from 0.97% in 2016 and 1.15% in 2017, dividend yield of 0%, expected life of 2 years and volatility of 1.00. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. The Company is actively seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt, or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders, and incurring additional indebtedness could involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Future Accounting Pronouncements In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, part of the FASB’s simplification initiative. ASU 2015-17 requires companies to classify deferred tax liabilities and assets as noncurrent. ASU 2015-17 is effective for fiscal years beginning after December 15, 2018. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In February 2016, the FASB issued ASU Update No. 2016-02 Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases to be recognized on the balance sheet. ASU 2016-02 is effective for the years beginning after December 15, 2018 and for all periods presented. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2016, the FASB issued ASU Update No. 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2016-07 is effective for the years beginning after December 15, 2016. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2016, the FASB issued ASU Update No. 2016-08, Revenue From Contracts with Customers (Topic 606). The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying the criteria in determining a principal versus agent relationship. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following five steps: (1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity satisfies performance obligations. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently evaluating what impact adoption of this guidance will have on our financial position, results of operations, cash flows and disclosures. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2016, the FASB issued ASU Update No. 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update are to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has yet to do a full analysis on the impact this will have but will do during the next fiscal year. | A summary of the significant accounting polices consistently applied in the preparation of the accompanying consolidated financial statement in accordance with accounting principles generally accepted in the United States of America (“GAAP”) is as follows. Basis of Consolidation The consolidated financial statements include the accounts of FGH, FGO, Cloud9 (from the date of acquisition), including Cloud9b2b and Cloud9 Accelerator, LLC, PAG (from the date of acquisition), BLI (from the date of acquisition), TCS (from the date of acquisition), and MDP (from the date of acquisition), (collectively referred to as “the Company”). All significant intercompany accounts and transactions have been eliminated on consolidation. Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. Trade Accounts Receivable Trade accounts receivable are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are recorded when received. There was no allowance for doubtful accounts recorded as of September 30, 2016 and 2015. In the normal course of business, the Company may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America. The Company does not believe that they are exposed to any significant risk of loss on accounts receivable. Prepaid Expenses Prepaid expenses consist of expenses the Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time the service has been provided. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives by the straight-line method. Maintenance and repairs are charged to earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded. Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases) are charged to income as incurred. Customer Relationships The customer relationships acquired from the TCS purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to it on the date of the purchase (see Note 9). The customer relationships are being amortized on a straight-line basis over a four-year estimated life. During the year ended September 30, 2016, the Company recorded amortization expense of $11,225 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $11,225. Future amortization of customer relationships is estimated to be as follows for the years ended September 30: 2017 $ 11,225 2018 11,225 2019 11,225 $ 33,675 Proprietary Content The proprietary content acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to it on the date of the purchase (see Note 9). The proprietary content is being amortized on a straight-line basis over an eight-year estimated life. During the year ended September 30, 2016, the Company recorded amortization expense of $65,638 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $65,638. Future amortization of proprietary content is estimated to be as follows for the years ended September 30: 2017 $ 65,638 2018 65,638 2019 65,638 2020 65,638 2021 65,638 Thereafter 131,273 $ 459,463 Trade Name The trade name acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to it on the date of the purchase (see Note 9). Management has determined that the trade name has an indefinite life and does not consider the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2016. Prospect List The prospect list acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $53,800, the value attributed to it on the date of the purchase (see Note 9). The prospect list is being amortized on a straight-line basis over a one-year estimated life. During the year ended September 30, 2016, the Company recorded the full amortization expense of $53,800 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $53,800. Non-compete Agreements Non-compete agreements established as a part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed to them on the date of the purchase (see Note 9). The non-compete agreements are being amortized on a straight-line basis over the five-year term of the non-compete clause of the agreement. During the year ended September 30, 2016, the Company recorded amortization expense of $5,260 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $5,260. Future amortization of the non-compete agreements is estimated to be as follows for the years ended September 30: 2017 $ 5,260 2018 5,260 2019 5,260 2020 5,260 $ 21,040 Trademarks The Company accounts for trademarks in accordance with GAAP and accordingly, trademarks are stated at cost. Trademarks with indefinite lives are not amortized but are tested for impairment at least annually. Management has determined that the trademarks have an indefinite life and do not consider the value of trademarks recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2016 and 2015. Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a two-step impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than its carrying value. Management does not consider the value of goodwill recorded for TCS in the accompanying consolidated balance sheet to be impaired as of September 30, 2016, and 2015. However, goodwill attributed to Cloud9 and MDP was deemed to be impaired as that business offering has been discontinued. The fair values of the assets acquired and liabilities assumed were determined primarily using the income approach, which determines the fair value for the asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The fair value of relationships were determined by projecting expected cash flows and subtracting the portion of the cash flow derived by the relevant contributory assets. The accompanying consolidated balance sheets, consolidated statements of operations, changes in stockholders’ equity and cash flows include the results of operations of the acquired subsidiaries from the date of acquisition. Goodwill consists of the following: Goodwill at September 30, 2014 $ – Goodwill generated from acquisition of Cloud9 (see note 9) 592,369 Goodwill generated from acquisition of MDP (see note 9) 70,598 Goodwill at September 30, 2015 662,967 Goodwill generated from acquisition of TCS (see note 9) 1,094,702 Impairment of Cloud9 (592,369 ) Impairment of MDP (70,598 ) Goodwill at September 30, 2016 $ 1,094,702 Income Taxes The Company accounts for Federal and state income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There was no accrued interest or penalties as of September 30, 2016 and 2015. From time to time, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s Federal returns since 2014 are still subject for examination by taxing authorities. Earnings Per Share Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Average number of common shares were 31,626,189 and 24,769,739 for years ended September 31, 2016 and 2015, respectively. For the years ended September 30, 2016 and 2015, approximately 2,200,346 and 1,500,996 common stock options, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. Revenue Recognition FG Wealth generates investment management fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage client investments. FG Tax and MDP generate service income from its consulting and other professional services performed. Commission revenue is derived from the sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized at the time the policy is issued. Revenue represents gross billings less discounts, and are net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets. TaxCoach Software has 3 types of services that are charged and collected on a month to month subscription basis (TaxCoach basic membership, All-Stars coaching, and Wire Service weekly broadcast email). None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships. Advertising Advertising costs are charged to operations when incurred. Advertising and marketing expense was $402,402 and $232,904 for the years ended September 30, 2016 and 2015, respectively. Stock-Based Compensation The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk free rate from 0.70% in 2015 and 0.97% in 2016, dividend yield of 0%, expected life of 2 years and volatility of 1.00. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. The Company is actively seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt, or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders, and incurring additional indebtedness could involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Future Accounting Pronouncements In April 2015, the FASB issued ASU No. 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, part of the FASB’s simplification initiative. ASU 2015-15 requires companies to present debt issuance costs the same way they currently present debt discounts, as a direct deduction from the carrying value of that debt liability. ASU 2015-15 does not impact the recognition and measurement guidance for debt issuance costs. ASU 2015-15 is effective for fiscal years beginning after December 15, 2015. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, part of the FASB’s simplification initiative. ASU 2015-17 requires companies to classify deferred tax liabilities and assets as noncurrent. ASU 2015-17 is effective for fiscal years beginning after December 15, 2018. In February 2016, the FASB issued ASU Update No. 2016-02, Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases to be recognized on the balance sheet. ASU 2016-02 is effective for the years beginning after December 15, 2018 and for all periods presented. Early application of the amendments in this ASU is permitted. In March 2016, the FASB issued ASU Update No. 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2016-07 is effective for the years beginning after December 15, 2016. Early application of the amendments in this ASU is permitted. In March 2016, the FASB issued ASU Update No. 2016-08, Revenue From Contracts with Customers (Topic 606). The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying the criteria in determining a principal versus agent relationship. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following five steps: (1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity satisfies performance obligations. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently evaluating what impact adoption of this guidance will have on our financial position, results of operations, cash flows and disclosures. In March 2016, the FASB issued ASU Update No. 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update are to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has yet to do a full analysis on the impact this will have but will do during the next fiscal year. |
2. Property and Equipment
2. Property and Equipment | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
2. Property and Equipment | Property and equipment consist of the following at June 30, 2017 and September 30, 2016: Estimated June 30, September 30, Furniture and fixtures 5 years $ 9,703 $ 6,994 Internally developed software 10 years 152,000 152,000 161,703 158,994 Less accumulated depreciation and amortization 29,314 17,914 $ 132,389 $ 141,080 Depreciation expense was $3,800 during each of the three months ended June 30, 2017 and 2016, respectively; and $11,400 during each of the nine months ended June 30, 2017 and 2016. | Property and equipment consist of the following at September 30: Estimated 2016 2015 Furniture and fixtures 5 years $ 6,994 $ 6,928 Internally developed software 10 years 152,000 – 158,994 6,928 Less accumulated depreciation and amortization 17,914 289 $ 141,080 $ 6,639 Depreciation expense was $17,625 and $289 during the years ended September 30, 2016 and 2015, respectively. |
3. Trademarks
3. Trademarks | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
3. Trademarks | Trademarks consist of the following: Trademarks at September 30, 2015 $ 20,174 Trademarks purchased at cost 2,418 Trademarks at September 30, 2016 22,592 Trademarks purchased at cost 50 Trademarks at June 30, 2017 $ 22,642 | Trademarks consist of the following: Trademarks at September 30, 2014 $ – Trademarks purchased from related party at cost 16,272 Trademarks purchased at cost 3,902 Trademarks at September 30, 2015 20,174 Trademarks purchased at cost 2,418 Trademarks at September 30, 2016 $ 22,592 |
4. Line of Credit
4. Line of Credit | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||
4. Line of Credit | The Company has a revolving line of credit with Wells Fargo Bank, N.A. in the amount of $55,000. Amounts drawn under this line of credit are due on demand, and monthly interest and principal payments are required. The interest rate on the line of credit is 7.5%. This line of credit is collateralized by the personal guarantee of the majority stockholder. Line of credit balance was $18,481 and $19,732 at June 30, 2017 and September 30, 2016, respectively. | The Company has a revolving line of credit with Wells Fargo Bank, N.A. in the amount of $55,000. Amounts drawn under this line of credit are due on demand, and monthly interest and principal payments are required. The interest rate on the line of credit is 7.5%. This line of credit is collateralized by the personal guarantee of the majority stockholder. Line of credit balance was $19,732 and $-0- for the years ended September 30, 2016 and 2015, respectively. |
5. Notes Payable
5. Notes Payable | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||
5. Notes Payable | With the acquisition of Tax Coach Software, LLC, the Company also acquired a promissory note payable to The Huntington National Bank. The note permits maximum borrowings of $100,000. Interest is paid monthly at prime plus 1.25% and the balance is due on demand. The facility matures in February 2018, is collateralized by substantially all assets of Tax Coach Software, LLC, and is secured by a personal guarantee from Keith VandeStadt, a significant stockholder of the Company. The balance outstanding under this note payable was $92,498 and $93,397 at June 30, 2017 and September 30, 2016, respectively. The Company entered into a Business Loan and Security Agreement to Small Business Financial Solutions, LLC, on October 28, 2016 in the amount of $100,000. The transaction is structured as an advance against assets. The lender has a security interest in all collateral of the Company, and outstanding under this note payable was $39,910 and $0 at June 30 2017, and September 30, 2016, respectively. | With the acquisition of Tax Coach Software, LLC, the Company also acquired a promissory note payable to The Huntington National Bank. The note permits maximum borrowings of $100,000. Interest is paid monthly at prime plus 1.25% and the balance is due on demand. The facility matures in February 2017, is collateralized by substantially all assets of Tax Coach Software, LLC, and is secured by a personal guarantee from Keith VandeStadt, a significant stockholder of the Company. The balance outstanding under this note payable was $93,397 and $0 at September 30, 2016 and 2015, respectively. |
6. Accrued Expenses
6. Accrued Expenses | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Payables and Accruals [Abstract] | ||
6. Accrued Expenses | Accrued expenses consist of the following at June 30, 2017 and September 30, 2016: June 30, September 30, 2016 Accrued payroll $ 45,627 $ 44,327 Accrued operating expenses 85,155 59,077 Deferred rent 250 7 $ 131,032 $ 103,654 | Accrued expenses consist of the following at September 30: 2016 2015 Accrued payroll $ 44,327 $ 35,778 Accrued operating expenses 59,077 7,615 Deferred rent 250 3,007 $ 103,654 $ 46,400 |
7. Income Taxes
7. Income Taxes | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
7. Income Taxes | For the three and nine months ended June 30, 2017 and 2016, the effective tax rate of 0% varies from the U.S. federal statutory rate primarily due to state income taxes, net losses, certain nondeductible expenses and an increase in the valuation allowance associated with the net operating loss carryforwards. Our deferred tax assets related to net operating loss carryforwards remain fully reserved due to uncertainty of utilization of those assets. A deferred tax liability or asset is determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred tax expense or benefit in the accompanying consolidated statements of operations are the result of changes in the assets and liabilities for deferred taxes. The measurement of deferred tax assets is reduced, if necessary, by the amount for any tax benefits that, based on available evidence, are not expected to be realized. Income tax expense is the current tax payable or refundable for the year plus or minus the net change in the deferred tax assets and liabilities. Deferred income taxes of the Company arise from the temporary differences between financial statement and income tax recognition of NOL carry-forwards. The deferred tax assets and liabilities in the accompanying consolidated balance sheets include the following components at June 30, 2017 and September 30, 2016: June 30, September 30, Net non-current deferred tax assets: Net operating loss carry-forward $ 1,336,430 $ 924,304 Net non-current deferred tax liabilities: Intangible assets 11,957 109,471 Net 1,324,743 814,833 Less valuation allowance (1,324,743 ) (814,833 ) Net deferred taxes $ – $ – | The Company elected C Corporation tax status upon inception in 2014. Net operating losses (“NOL”) since that date total $3,079,023 as of September 30, 2016, and may be carried forward to offset future taxable income; accordingly, no current provision for income tax has been recorded in the accompanying statements of operations. NOL carry-forward benefits begin to expire in 2035. The following table summarizes the difference between the actual tax provision and the amounts obtained by applying the statutory tax rates to the income or loss before income taxes for the years ended September 30: 2016 2015 Tax benefit calculated at statutory rate 35% 35% Changes to valuation allowance (35% ) (35% ) Provision for income taxes 0% 0% A deferred tax liability or asset is determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these differences reverse. Deferred tax expense or benefit in the accompanying consolidated statements of operations are the result of changes in the assets and liabilities for deferred taxes. The measurement of deferred tax assets is reduced, if necessary, by the amount for any tax benefits that, based on available evidence, are not expected to be realized. Income tax expense is the current tax payable or refundable for the year plus or minus the net change in the deferred tax assets and liabilities. Deferred income taxes of the Company arise from the temporary differences between financial statement and income tax recognition of NOL carry-forwards. The deferred tax assets and liabilities in the accompanying consolidated balance sheets include the following components at September 30: 2016 2015 Net non-current deferred tax assets: Net operating loss carry-forward $ 924,304 $ 330,359 Net non-current deferred tax liabilities: Intangible assets 109,471 – Net 814,833 330,359 Less valuation allowance (814,833 ) (330,359 ) Net deferred taxes $ – $ – |
8. Commitments, Contingencies a
8. Commitments, Contingencies and Concentrations | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
8. Commitments, Contingencies and Concentrations | Leases The Company conducts operations from leased premises. Some of these leases provide for payment of taxes, insurance, utilities and maintenance. The Company also leases certain equipment under operating leases. Total rent expense for the three months ended June 30, 2017 and 2016 was $22,887 and $19,481, respectively; and $45,088 and $39,717 for the nine months ended June 30, 2017 and 2016, respectively. Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rental expense and rental payments is recorded as deferred rent within accrued expenses in the accompanying consolidated balance sheets. Management expects that in the normal course of business, leases will be renewed or replaced by other leases. Future minimum rental obligations as of June 30, 2017 are as follows: 2017 $ 17,100 2018 68,400 2019 5,700 $ 91,200 Contingencies Prior to the merger, Pacific Oil Company had approximately $75,000 outstanding payables. A stock pledge from prior management has been earmarked to pay down the balance. Management believes the amount is sufficient to pay the balance in full. Legal Proceedings From time to time, we are a party to or otherwise involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our business or otherwise. A subsidiary of the Company is currently involved in one legal proceeding, the outcome of which will not be material to our ability to operate or market our services, our consolidated financial position, results of operations or cash flows. | Leases The Company conducts operations from leased premises. Some of these leases provide for payment of taxes, insurance, utilities and maintenance. The Company also leases certain equipment under operating leases. Total rent expense for the years ended September 30, 2016 and 2015 was $89,150 and $86,149, respectively. Rent expense is recorded on a straight-line basis over the term of the lease. The difference between rental expense and rental payments is recorded as deferred rent within accrued expenses in the accompanying consolidated balance sheets. Management expects that in the normal course of business, leases will be renewed or replaced by other leases. 2017 $ 81,902 2018 68,400 2019 5,700 $ 156,002 Deposits Deposits represented a down payment of $50,000 made on a potential purchase at September 30, 2015. The application of the deposit to the purchase price was contingent upon the completion of the acquisition. This acquisition did not take place and this deposit was ultimately forfeited during the year ended September 30, 2016. Contingencies Under the terms of the TCS purchase agreement, the common stock issued has been placed in escrow. The sellers maintain the right to unwind this transaction under certain conditions (see Note 9). Pacific Oil Company still has some outstanding payables that the previous owners are in process of liquidating. Those liabilities have been shown here but are expected to be settled by the previous owners. However, shares of the Company are being held in escrow to cover the chance that these liabilities will ultimately have to be settled by the Company. Legal Proceedings From time to time, we are a party to or otherwise involved in legal proceedings, claims and other legal matters, arising in the ordinary course of our business or otherwise. A subsidiary of the Company is currently involved in one legal proceeding, the outcome of which will not be material to our ability to operate or market our services, our consolidated financial position, results of operations or cash flows. |
9. Business Acquisitions
9. Business Acquisitions | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Business Combinations [Abstract] | ||
9. Business Acquisitions | Business Acquisition – Tax Coach Software, Inc. Effective October 1, 2015, the Company completed the acquisition of Tax Coach Software, LLC, an Ohio limited liability company (“Tax Coach Software”). The purchase was made by Financial Gravity Holdings, Inc. Under the terms of the acquisition, the Company acquired 100% of Tax Coach Software’s membership interests, for shares of common stock of the Company. The total number of shares of common stock issued to the owners of Tax Coach Software was 6,000,000 shares (as amended), at par value of $0.00001 per share, in exchange for 100% of the membership interests of Tax Coach Software. Goodwill, as a result of this acquisition, is not deductible for tax purposes. Certificates representing the shares of common stock which served as the purchase price, were required to be deposited in escrow as of the effective date of the acquisition. As part of the purchase agreement documentation, the Sellers maintained the right to unwind the transaction under certain conditions as described. The Sellers also retained all rights as shareholders while shares were held in escrow, including the right to vote. Under the escrow agreement, if the average daily closing price of the shares for any continuous 10-day trading period equals or exceeds $1.00 during the thirty-six months following October 28, 2015, the Company had the right to cause the shares deposited in escrow to be distributed to the Sellers, terminating any right to unwind the transaction. If the shares did not trade as to provide a closing price during the thirty-six months following October 28, 2015 or if the average daily closing price of the shares for any continuous 10-day trading period failed to equal or exceed $1.00 during the thirty-six months following October 28, 2015, then no later than five days following the conclusion of the thirty-six month period, the Sellers would have the right to unwind the acquisition of Tax Coach Software by the Company and the Company would immediately transfer the ownership of Tax Coach Software back to the Sellers in exchange for the return of common stock issued during the acquisition. The closing price was defined as the last closing trade price for the shares on an electronic bulletin board as reported by Bloomberg or on the NASDAQ Capital Market or the highest bid price as reported on “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If listed for trading on the American or New York Stock Exchange during the thirty-six months following October 28, 2015 it will be deemed to meet the $1.00 benchmark. On November 11, 2016, the parties to the escrow agreement agreed (in a Company Distribution Notice) that the average daily closing price of the shares had exceeded the $1.00 threshold and accordingly, the shares were released from escrow and the right to unwind the Tax Coach Software acquisition transaction terminated. Three employment agreements were entered into as a condition to the acquisition. Each agreement has an effective date as of November 1, 2015 and is effective for a period of three years. Two employment agreements include a base salary of $42,000 per year, per employee. These same two agreements, include a bonus that is calculated, for each employee, as the sum of 40% of the gross profit of Tax Coach Software for all revenues that exceed $850,000 and are less than $950,000 and 20% of the gross profit of Tax Coach Software for all revenues earned in excess of $950,000. One employment agreement includes a base salary of $60,000 per year. This same agreement, includes a bonus that is calculated as the sum of 20% of the gross profit of Tax Coach Software for all revenues that exceed $850,000 and are less than $950,000 and 10% of the gross profit of Tax Coach Software for all revenues earned in excess of $950,000. Gross profit is determined in accordance with generally acceptable accounting principles, net of other amounts paid under employment and consulting agreements. The agreements also include certain termination and non-compete clauses. Compensation during the month of October 2015 to be paid to the three employees totals an aggregate amount of $49,150. In addition to the referenced employment agreements, three consulting agreements were entered into as a condition to the acquisition. Two agreements require certain services at a fixed fee of $17,000 per month, per agreement, commencing on November 1, 2015 with a 90-day termination clause. One agreement requires certain services at a fixed fee of $3,500 per month, commencing on November 1, 2015 with a 90-day termination clause. $444,650 in professional fees were paid under these three agreements in the year ended September 30, 2016. Tax Coach Software, located in Cincinnati, Ohio, provides three primary services including monthly subscription revenue from the “Tax Coach” software system, coaching revenue and email marketing services for customers. The transaction resulted in a fair value of the acquisition of $1,094,702 as follows: Common stock issued in stock exchange at a value of $0.25 per share (as amended) $ 1,500,020 Additional paid in capital for the escrow agreement provision 404,600 Total value of the goodwill generated on acquisition 1,904,620 Intangible assets acquired (719,400 ) Net tangible assets acquired (90,518 ) Total assets acquired (809,918 ) Total fair value of acquisition $ 1,094,702 The intangible assets were as follows: Customer relationships $ 44,900 Proprietary content 525,100 Trade name 69,300 Prospect list 53,800 Non-compete agreements 26,300 Total intangible assets $ 719,400 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 57,025 Accounts receivable 15,476 Accounts receivable - other 5,408 Internally developed software 152,000 Total tangible assets 229,909 Liabilities assumed: Accrued expenses 69,485 Note payable 69,906 Total liabilities 139,391 Net acquired assets $ 90,518 The primary asset acquired from Tax Coach Software is the proprietary content which includes a comprehensive platform of tax planning strategies including marketing and instructional guides. TCS will provide the Company with expertise in areas of service which expand beyond the Company’s current service areas. The Company believes they will also be able to leverage the use of the proprietary content in maximizing the benefits of consulting with customers. The acquisition of this entity increases the additional services the Company can provide to high net worth individuals and business in accordance with its strategic business plan. | Business Acquisition – Cloud9 Effective December 31, 2014, the Company completed the acquisition of Cloud9, a business consulting firm located in Allen, Texas. Under the terms of the acquisition, the Company acquired 100% of Cloud9’s stock in a stock exchange. Total stock exchanged during the year ended September 30, 2015, was approximately 1,314,477 shares, at par value of $0.001 per share, from the Company for all 40,000,000 shares of Cloud9. Goodwill, as a result of this acquisition, is not deductible for tax purposes. The transaction resulted in recording liabilities and goodwill at a fair value of $592,369 as follows: Common stock issued in stock exchange $ 438,159 Net liabilities assumed 154,210 Total value of the goodwill generated on acquisition $ 592,369 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 30,840 Accounts receivable 22,039 Prepaid expenses and deposits 7,000 Total tangible assets 59,879 Liabilities assumed: Accounts payable 30,407 Accounts payable - intercompany eliminated upon consolidation 51,000 Accounts payable - related party 132,682 Total liabilities 214,089 Net acquired liabilities $ (154,210 ) The primary asset acquired from Cloud9 is the expertise of Cloud9, which the Company believes it will be able to leverage in maximizing the benefits of consulting with customers. As of September 30, 2015, these factors contributed to a purchase price in excess of the fair value of Cloud9’s tangible assets acquired, and, as a result, the Company has recorded goodwill in the amount of $592,369 in connection with this transaction which is recorded in the accompanying consolidated balance sheets. As noted in Note 1, the Company reviewed the enterprise value of the Cloud9 entity in fiscal 2016 and determined that the value of Goodwill that was acquired was no longer supported. As such, $592,369 was written off during the year ended September 30, 2016. Business Acquisition – Business Legacy, Inc. and Pollock Advisory Group, Inc. Effective January 1, 2015 Financial Gravity Operations, Inc. completed the acquisition of Business Legacy, Inc. and Pollock Advisory Group, Inc., related financial services firms located in Allen, Texas. Under the terms of the acquisition, the Company acquired 100% of stock of Business Legacy, Inc. and Pollock Advisory Group, Inc., wholly-owned entities of the majority stockholder of Financial Gravity Holdings, Inc. for no cost. The transaction resulted in recording a gain within APIC (as the entities were under common control) of $26,316 as follows: Net assets acquired $ 26,316 Total gain on bargain purchase generated at acquisition of entities under common control $ 26,316 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 22,350 Accounts receivable 73,321 Accounts receivable - related party 9,272 Prepaid expenses 11,528 Fixed assets 32,316 Total tangible assets 148,787 Liabilities assumed: Accounts payable 15,505 Accrued expenses 22,383 Line of credit 55,000 Capital lease obligations 29,583 Total liabilities 122,471 Net acquired assets $ 26,316 The primary asset acquired from Business Legacy, Inc. and Pollock Advisory Group is the expertise in the respective area of service. The Company believes they will be able to leverage this expertise in maximizing the benefits of consulting with customers. The acquisition of these two entities increases the additional services the Company can provide to high net worth individuals and business in accordance with the strategic business plan of the Company. Business Acquisition – SASH Corporation d.b.a. Metro Data Processing Effective August 12, 2015, the Company completed the acquisition of SASH Corporation, an Oklahoma corporation doing business as MDP. The purchase was made by a subsidiary of the Company, Cloud9 Accelerator, LLC. Under the terms of the acquisition, the Company agreed to purchase 100% of stock of MDP for $75,800. The terms also require two employees of MDP to continue working in their current role for a period of not less than 12 months and not less than 6 months for compensation of an amount that is not less than $30,000 and $24,000, respectively. Goodwill, as a result of this acquisition, is not deductible for tax purposes. MDP, located in Tulsa, Oklahoma, provides payroll services, software, and support solutions to business owners. The transaction resulted in recording assets and goodwill at a fair value of $70,598 as follows: Cash consideration $ 75,800 Less: net assets acquired (5,202 ) Total value of the goodwill generated on acquisition $ 70,598 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 4,121 Accounts receivable 2,903 Accounts receivable - other 5,800 Total tangible assets 12,824 Liabilities assumed: Accounts payable 7,622 Total liabilities 7,622 Net acquired assets $ 5,202 The primary asset acquired from MDP is the expertise in the respective area of service. The Company believes they will be able to leverage the expertise of MDP as a payroll service provider in Oklahoma which will also allow for an expansion of services to provide further access to high net worth individuals and businesses beyond the Dallas/Ft. Worth area in accordance with the strategic business plan of the Company. As noted in Note 1, the Company reviewed the enterprise value of the MDP entity in fiscal 2016 and determined that the value of Goodwill that was acquired was no longer supported. As such, $70,598 was written off during the year ended September 30, 2016. Business Acquisition – Tax Coach Software, Inc. Effective October 1, 2015, the Company completed the acquisition of Tax Coach Software, LLC, an Ohio limited liability company (“Tax Coach Software”). The purchase was made by Financial Gravity Holdings, Inc. Under the terms of the acquisition, the Company acquired 100% of Tax Coach Software’s stock in a stock exchange. Total stock exchanged was 6,000,000 shares (as amended), at par value of $0.001 per share, from the Company for 100% of the shares of Tax Coach Software. Goodwill, as a result of this acquisition, is not deductible for tax purposes. Certificates representing the shares were required to be deposited in escrow as of the effective date of the acquisition. As part of the purchase agreement documentation, the Sellers maintained the right to unwind the transaction under certain conditions as described. The Sellers also retained all rights as shareholders while shares were held in escrow, including the right to vote. Under the escrow agreement, if the average daily closing price of the shares for any continuous 10-day trading period equals or exceeds $1.00 during the thirty-six months following October 28, 2015, the Company had the right to cause the shares deposited in escrow to be distributed to the Sellers, terminating any right to unwind the transaction. If the shares did not trade as to provide a closing price during the thirty-six months following October 28, 2015 or if the average daily closing price of the shares for any continuous 10-day trading period failed to equal or exceed $1.00 during the thirty-six months following October 28, 2015, then no later than five days following the conclusion of the thirty-six month period, the Sellers would have the right to unwind the acquisition of Tax Coach Software by the Company and the Company would immediately transfer the ownership of Tax Coach Software back to the Sellers in exchange for the return of common stock issued during the acquisition. The closing price was defined as the last closing trade price for the shares on an electronic bulletin board as reported by Bloomberg or on the NASDAQ Capital Market or the highest bid price as reported on “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If listed for trading on the American or New York Stock Exchange during the thirty-six months following October 28, 2015 it will be deemed to meet the $1.00 benchmark. On November 11, 2016, the parties to the escrow agreement agreed (in a Company Distribution Notice) that the average daily closing price of the shares had exceeded the $1.00 threshold and accordingly, the shares were released from escrow and the right to unwind the Tax Coach Software acquisition transaction terminated. Three employment agreements were made as a condition to the acquisition. Each agreement has an effective date as of November 1, 2015 and is effective for a period of three years. Two employee agreements include a base salary of $42,000 per year, per employee. These same two agreements, include a bonus that is calculated, for each employee, as the sum of 40% of the gross profit of Tax Coach Software for all revenues that exceed $850,000 and are less than $950,000 and 20% of the gross profit of Tax Coach Software for all revenues earned in excess of $950,000. One employee agreement includes a base salary of $60,000 per year. This same agreement, includes a bonus that is calculated as the sum of 20% of the gross profit of Tax Coach Software for all revenues that exceed $850,000 and are less than $950,000 and 10% of the gross profit of Tax Coach Software for all revenues earned in excess of $950,000. Gross profit is determined in accordance with generally acceptable accounting principles, net of other amounts paid under employment and consulting agreements. The agreements also include other certain termination and non-compete clauses. Compensation during the month of October 2015 to be paid to the three employees totals an aggregate amount of $49,150. Three consulting agreements were made as a condition to the acquisition. Two agreements require certain services at a fixed fee of $17,000 per month, per agreement, commencing on November 1, 2015 with a 90-day termination clause. One agreement requires certain services at a fixed fee of $3,500 per month, commencing on November 1, 2015 with a 90-day termination clause. $444,650 in professional fees were paid under these 3 agreements in the year ended September 30, 2016. Tax Coach Software, located in Cincinnati, Ohio, provides three primary services including monthly subscription revenue from the “Tax Coach” software system, coaching revenue and email marketing services for customers. The transaction resulted in a fair value of the acquisition of $1,094,702 as follows: Common stock issued in stock exchange at a value of $0.25 per share (as amended) $ 1,500,020 Additional paid in capital for the escrow agreement provision 404,600 Total value of the goodwill generated on acquisition 1,904,620 Intangible assets acquired (719,400 ) Net tangible assets acquired (90,518 ) Total assets acquired (809,918 ) Total fair value of acquisition $ 1,094,702 The intangible assets were as follows: Customer relationships $ 44,900 Proprietary content 525,100 Trade name 69,300 Prospect list 53,800 Non-compete agreements 26,300 Total intangible assets $ 719,400 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 57,025 Accounts receivable 15,476 Accounts receivable - other 5,408 Internally developed software 152,000 Total tangible assets 229,909 Liabilities assumed: Accrued expenses 69,485 Line of credit 69,906 Total liabilities 139,391 Net acquired assets $ 90,518 The primary asset acquired from Tax Coach Software is the proprietary content which includes a comprehensive platform of tax planning strategies including marketing and instructional guides. TCS will provide the Company with expertise in areas of service which expand beyond the Company’s current service areas. The Company believes they will also be able to leverage the use of the proprietary content in maximizing the benefits of consulting with customers. The acquisition of this entity increases the additional services the Company can provide to high net worth individuals and business in accordance with its strategic business plan. Supplemental Unaudited Pro Forma Information As noted above, all acquisitions were completed prior to or as of October 1, 2015. Accordingly, fiscal year 2016 includes the full impact of all the acquisitions. The fiscal year 2015 acquisitions were effective at various parts of the year, and had each of the acquisitions been effective on October 1, 2015, the revenue and net income/(loss) would be as follows: As Reported Cloud9 BLI PAG MDP TCS Pro Forma FY 2015 10/1/14 - 10/1/14 - 10/1/14 - 10/1/14 - 10/1/14 - FY 2015 Total Revenue $ 1,309,801 $ 61,800 $ 340,403 $ 222,925 $ 102,550 $ 860,805 $ 2,898,284 Net (Loss) / Income $ (943,884 ) $ (9,024 ) $ (52,446 ) $ 62,548 $ 12,468 $ 395,007 $ (535,331 ) TCS net income includes expenses for the amortization of the definite lived intangibles of $82,123. Operating expenses recognized in fiscal year 2015 were approximately $4,000 for MDP and $660 for Cloud9. The BLI and PAG acquisitions each had immaterial amounts of operating expenses associated with them. Operating expenses recognized in fiscal year 2016 were approximately $44,000 for TCS. |
10. Stockholders' Equity
10. Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
STOCKHOLDERS' EQUITY | ||
10. Stockholders' Equity | Common Stock The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.001 per share. Preferred Stock The Company does not have a preferred stock authorization in its articles of incorporation. Financial Gravity Holdings, a subsidiary of the Company, has authorized the issuance of up to 10,000,000 shares of preferred stock, by action of the Board of Directors. The preferred stock authorization has not been formalized via the filing of an amendment to the certificate of formation of Financial Gravity Holdings. The rights and obligations of the preferred stock are as determined by the Board of Directors at the time of issuance. For each of the Company and Financial Gravity Holdings, its subsidiary, no preferred shares are issued or outstanding as of June 30, 2017 and September 30, 2016, respectively. Warrants As part of the sale of common shares starting October 2016, the Company granted to investors who invest at value of $100,000 or above common stock purchase warrants (the “Warrants”). In the quarter ended December 31, 2016 there were three individual investments of $100,000 for which the Company issued warrants for the purchase of 75,000 shares of common stock of the Company at an exercise price of $1.25 per share for a 1-year term and an additional 75,000 shares of common stock of the Company at an exercise price of $1.50 for a 2-year term. In the quarter ended March 31, 2017 there were two individual investments of at least $100,000 for which the Company issued warrants for the purchase of 50,000 shares of common stock of the Company at an exercise price of $1.25 per share for a 1-year term and an additional 50,000 shares of common stock of the Company at an exercise price of $1.50 for a 2-year term. The Company follows the provisions of ASC 815, “Derivatives and Hedging”. ASC 815 requires freestanding contracts that are settled in a company’s own stock to be designated as an equity instrument, assets or liability. Under the provisions of ASC 815, a contract designated as an asset or liability must be initially recorded and carried at fair value until the contract meets the requirements for classification as equity, until the contract is exercised or until the contract expires. However, the Company determined that these warrants should be accounted for as equity and as such no determination of fair value was necessary. Private Placement Memorandum, Financial Gravity Holdings On October 31, 2014, Financial Gravity issued a private placement memorandum (“PPM”) for stock purchases of up to 2,000,000 shares of common stock at a cost of $1.00 and a par value of $0.00001, with a minimum purchase level of $50,000 per investor. The subscription period initially expired June 30, 2015, however, the Board of Directors extended the offering period indefinitely, and increased the number of shares authorized for sale under the PPM incrementally to accommodate additional investor interest. During the years ended September 30, 2016 and 2015, 785,000 shares and 5,625,000 shares, respectively, were issued under the PPM for $535,000 and $1,875,000 of additional paid-in capital at September 30, 2016 and 2015, respectively. Additional Common Stock Issuances, Financial Gravity Holdings During the year ended September 30, 2016, one of the founding members of Financial Gravity Holdings forfeited 2,926,294 common shares, in addition to the issuance of shares sold under the PPM and common shares issued in connection with the Tax Coach Software, LLC acquisition. Additional Common Stock Issuances, Financial Gravity Companies, Inc On April 1, 2017, the Company entered into an agreement with FMW Media Works Corp (“FMW”), wherein FMW would provide television, production, and media analysis to the Company. The Company issued 50,000 shares of common stock, worth $50,000, to FMW along with $3,500 cash as payment for services. During the nine months ended June 30, 2017, the Company sold 675,000 shares of common stock for $625,000. Stock Split, Financial Gravity Holdings Effective October 20, 2015, Financial Gravity Holdings declared a three for one stock split of its common stock. Upon the stock split, every one share of common stock issued and outstanding was automatically reclassified and converted into three shares of common stock. The common stock retained a par value of $0.00001 per share. | Common Stock The Company is authorized to issue up to 300,000,000 shares of common stock, par value $0.001 per share. Preferred Stock The Company does not have a preferred stock authorization in its articles of incorporation. Financial Gravity Holdings, a subsidiary of the Company, has authorized the issuance of up to 10,000,000 shares of preferred stock, by action of the Board of Directors. The preferred stock authorization has not been formalized via the filing of an amendment to the certificate of formation of Financial Gravity Holdings. The rights and obligations of the preferred stock are as determined by the Board of Directors at the time of issuance. For each of the Company and Financial Gravity Holdings, its subsidiary, no preferred shares are issued or outstanding as of September 30, 2016 and 2015, respectively. Private Placement Memorandum, Financial Gravity Holdings On October 31, 2014, Financial Gravity issued a private placement memorandum (“PPM”) for stock purchases of up to 2,000,000 shares of common stock at a cost of $1.00 and a par value of $0.00001, with a minimum purchase level of $50,000 per investor. The subscription period initially expired June 30, 2015, however, the Board of Directors extended the offering period indefinitely, and increased the number of shares authorized for sale under the PPM incrementally to accommodate additional investor interest. During the years ended September 30, 2016 and 2015, 785,000 shares and 5,625,000 shares, respectively, were issued under the PPM for $535,000 and $1,875,000 of additional paid-in capital at September 30, 2016 and 2015, respectively. Additional Common Stock Issuances, Financial Gravity Holdings During the year ended September 30, 2015, Financial Gravity Holdings issued 21,150,000 shares of common stock in addition to the shares sold under the PPM and common shares issued in connection with the Cloud9 Holding Company acquisition that were discussed above. Also during September 30, 2015, 300,000 common shares were issued to two non-employee directors. During the year ended September 30, 2016, one of the founding members of Financial Gravity Holdings forfeited 2,926,294 common shares, in addition to the issuance of shares sold under the PPM and common shares issued in connection with the Tax Coach Software, LLC acquisition, both of which are discussed above. Subsequent to September 30, 2016, Financial Gravity Holdings has sold 350,000 shares of common stock. Stock Split, Financial Gravity Holdings Effective October 20, 2015, Financial Gravity Holdings declared a three for one stock split of its common stock. Upon the stock split, every one share of common stock issued and outstanding was automatically reclassified and converted into three shares of common stock. The common stock retained a par value of $0.00001 per share. |
11. Stock Option Plan
11. Stock Option Plan | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
11. Stock Option Plan | Effective February 27, 2015, the Company established the 2015 Stock Option Plan (the “Plan”). The Board of Directors of the Company has the authority and discretion to grant stock options. The maximum number of shares of stock that may be issued pursuant to the exercise of options under the Plan is 9,000,000. Eligible individuals include any employee of the Company or any director, consultant, or other person providing services to the Company. The expiration date and exercise price are as established by the Board of Directors of the Company. No option may be issued under the Plan after February 27, 2017. Effective November 22, 2016, the Company established the 2016 Stock Option Plan (the “2016 Plan”). The Board of Directors of the Company has the authority and discretion to grant stock options. The maximum number of shares of stock that may be issued pursuant to the exercise of options under the 2016 Plan is 20,000,000. Eligible individuals include any employee of the Company or any director, consultant, or other person providing services to the Company. The expiration date and exercise price are as established by the Board of Directors of the Company. No option may be issued under the Plan after ten years from the date of adoption of the 2016 Plan. Shares Value of Weighted Weighted Outstanding - September 30, 2015 1,500,996 $ 7,359 $ 0.33 Granted 1,024,400 $ 19,677 1.00 102 months Exercised – – – – Canceled or expired 325,050 $ 4,907 0.33 – Outstanding - September 30, 2016 2,200,346 $ 22,129 0.64 101 months Granted 32,000 $ 11,532 1.94 114 months Exercised – – Canceled or expired – – Outstanding - December 31, 2016 2,232,346 $ 33,661 Exercisable - December 31, 2016 2,200,346 0.64 97 months Granted 37,600 $ – 1.19 116 months Exercised – – – Canceled or expired – – – Outstanding - March 31, 2017 2,269,946 $ – Exercisable - March 31, 2017 2,215,379 0.64 100 months Granted 19,800 $ – 1.19 116 months Exercised – – – Canceled or expired 37,600 – 1.19 Outstanding - June 30, 2017 2,252,146 $ – Exercisable - June 30, 2017 2,215,171 0.65 100 months All outstanding stock options at September 30, 2016 became immediately vested upon the completion of the reverse merger with Pacific Oil Company. Total compensation expense of $22,129 for these options was included in salaries and wages in the year ended September 30, 2016. There were 19,800 stock options granted from the 2016 stock option plan in the three months ended June 30, 2017. There were 37,600 stock options cancelled from the 2016 stock option plan in the three months ended June 30, 2017. The unamortized value of these stock options is $0. There were 32,000 stock options granted from the 2016 stock option plan in the three months ended December 31, 2016. The unamortized value of these stock options is $11,532 at June 30, 2017. | Effective February 27, 2015, the Company established the 2015 Stock Option Plan (the “Plan”). The Board of Directors of the Company has the authority and discretion to grant stock options. The maximum number of shares of stock that may be issued and exercised under the Plan is 9,000,000. Eligible individuals include any employee of the Company or any director, consultant, or other person providing services to the Company. The expiration date and exercise price are as established by the Board of Directors of the Company. No option may be issued under the Plan after February 27, 2017. Stock option activity is summarized as follows: 2016 2015 Shares Value of Weighted Weighted Shares Value of Weighted Weighted Outstanding - beginning of year 1,500,996 $ 7,359 $ 0.33 – $ – – Granted 1,024,400 $ 19,677 1.00 111 months 1,520,196 $ 7,649 0.33 119 months Exercised – – – – – – Canceled or expired 325,050 $ 4,907 0.33 – 19,200 $ 290 0.33 – Outstanding - end of year 2,200,346 $ 22,129 0.64 109 months 1,500,996 0.33 119 months Exercisable - end of year 2,200,346 0.64 109 months – – – All outstanding stock options at September 30, 2016 became immediately vested upon the completion of the reverse merger with Pacific Oil Company. Total compensation expense included in salaries and wages of previously unamortized stock compensation was $22,715 and $0 for the years ended September 30, 2016 and 2015, respectively. |
12. Related Party Transactions
12. Related Party Transactions | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Related Party Transactions [Abstract] | ||
12. Related Party Transactions | Accounts receivable due from the majority stockholder of the entity, included in accounts receivable – related party in the accompanying consolidated balance sheets was $4,506 and $4,506 as of June 30, 2017 and September 30, 2016, respectively. Management fees paid to the majority stockholder of the entity, included as management fees - related party in the accompanying consolidated statement of operations were $50,000 and $50,000 for the three months ended June 30, 2017, and 2016, respectively; and $153,000 and $163,333 for the nine months ended June 30, 2017, and 2016, respectively. A board member who is also a stockholder provided services to the Company. Expenses for these services totaled $0 and $15,000 for the three months ended June 30, 2017, and 2016, respectively; and $9,000 and $40,000 for the nine months ended June 30, 2017, and 2016, respectively, and were included as general and administrative expenses in the accompanying consolidated statement of operations. Included in professional fees were consulting fees paid to a related party as a condition to the TCS acquisition. Two agreements require certain services at a fixed fee of $16,500 per month, per agreement, commencing on November 1, 2015 with a 90-day termination clause. One agreement requires certain services at a fixed fee of $3,500 per month, commencing on November 1, 2015 with a 90-day termination clause. $109,500 in professional fees were paid under these 3 agreements for each of the three months ended June 30, 2017 and June 30, 2016, respectively. $225,600 in professional fees were paid under these 3 agreements for each of the nine months ended June 30, 2017 and June 30, 2016, respectively. | Effective December 31, 2014, the Company acquired Cloud9 (see Note 9). The majority stockholder of Cloud9 Holdings Company is also a stockholder of the Company. Effective January 1, 2015, the Financial Gravity Operations, Inc. also acquired BLI and PAG (see Note 9). BLI and PAG were acquired at no cost from a major stockholder of FGH. Account receivable due for services performed for a related party, included in accounts receivable – related party in the accompanying consolidated balance sheets was $-0- and $27,267 as of September 30, 2016, and 2015. Accounts receivable due from the majority stockholder of the entity, included in accounts receivable – related party in the accompanying consolidated balance sheets was $4,506 and $2,059 as of September 30, 2016, and 2015. The Company also has a payable due to a stockholder related to payment for services provided and repayment for goods (as incurred through the acquisition of Cloud9) and services purchased on behalf of the Company of approximately $-0- and $2,300 as of September 30, 2016 and 2015. This is included in the consolidated balance sheets as accounts payable - related party. Management fees paid to the majority stockholder of the entity, included as management fees - related party in the accompanying consolidated statement of operations were $213,333 and $155,657 for fiscal 2016, and 2015. A board member who is also a stockholder provided services to the Company. Expenses for these services totaled $49,000 and $9,020 for the years ending September 30, 2016, and 2015, respectively, and were included as general and administrative expenses in the accompanying consolidated statement of operations. |
13. Subsequent Events
13. Subsequent Events | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Subsequent Events [Abstract] | ||
13. Subsequent Events | On July 31, 2017, the Company entered into a Promissory Note Payable to Fourly Enterprises, LLC (“Fourly”) in the amount of $50,000. The interest rate on the note is 20%. The note matures on August 16, 2018. Fourly is owned by the majority stockholder of the Company. On August 9, 2017 the Company entered into a Promissory Note Payable Elmer Fink (“Fink”) in the amount of $100,000. The interest rate on the note is 10%. The note matures July 31, 2020. Subsequent to June 30, 2017, the Company has issued 100,000 common shares for $100,000. As part of the common stock issuance, the Company has issued 25,000 warrants excisable at an exercise price of $1.25 per share and having a 1-year term, plus an additional 25,000 warrants at an exercise price of $1.50 and having a 2-year term. Mr. Rick Johnson, Chief Operating Officer of Financial Gravity Companies, Inc., has tendered his resignation effective August 4, 2017. | In addition to the 350,000 common shares issued subsequent to September 30, 2016 for $350,000 and the Company has issued 150,000 warrants exercisable for $206,250. In December 2016, the Company’s board authorized 20 million shares to be made available under a new Stock Option Plan. |
1. Summary of Significant Acc21
1. Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the accounts of FGH, FGO, Cloud9 (from the date of acquisition), including Cloud9b2b and Cloud9 Accelerator, LLC, PAG (from the date of acquisition), BLI (from the date of acquisition), TCS (from the date of acquisition), and MDP (from the date of acquisition), (collectively referred to as “the Company”). All significant intercompany accounts and transactions have been eliminated on consolidation. | Basis of Consolidation The consolidated financial statements include the accounts of FGH, FGO, Cloud9 (from the date of acquisition), including Cloud9b2b and Cloud9 Accelerator, LLC, PAG (from the date of acquisition), BLI (from the date of acquisition), TCS (from the date of acquisition), and MDP (from the date of acquisition), (collectively referred to as “the Company”). All significant intercompany accounts and transactions have been eliminated on consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. | Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less, when purchased, to be cash equivalents. The Company maintains cash balances at several financial institutions located throughout the United States, which at times may exceed insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Trade Accounts Receivable | Trade Accounts Receivable Trade accounts receivable are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are recorded when received. There was no allowance for doubtful accounts recorded as of June 30, 2017 and September 30, 2016. In the normal course of business, the Company may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America. The Company does not believe that it is exposed to any significant risk of loss on accounts receivable. | Trade Accounts Receivable Trade accounts receivable are carried at the invoiced amount less an estimate made for doubtful accounts based on management’s review of outstanding balances. The collectability of the Company’s accounts receivable is reviewed on an ongoing basis, using historical payment trends and a review of specific accounts. Accounts receivable are written off after all reasonable collection efforts have been exhausted and when management determines the amounts to be uncollectible. Recoveries of receivables previously written off are recorded when received. There was no allowance for doubtful accounts recorded as of September 30, 2016 and 2015. In the normal course of business, the Company may extend credit to its customers, on an unsecured basis, substantially all of whom are located in the United States of America. The Company does not believe that they are exposed to any significant risk of loss on accounts receivable. |
Prepaid Expenses | Prepaid Expenses Prepaid expenses consist of expenses the Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time the service has been provided. | Prepaid Expenses Prepaid expenses consist of expenses the Company has paid for prior to the service or good being provided. These prepaid expenses will be recorded as expense at the time the service has been provided. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives by the straight-line method. Maintenance and repairs are charged to earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded. Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases) are charged to income as incurred. | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is provided in amounts sufficient to relate the cost of depreciable assets to earnings over their estimated service lives by the straight-line method. Maintenance and repairs are charged to earnings as incurred; major repairs and replacements are capitalized. When items of property or equipment are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is included in operations. Property and equipment operated under material leases which transfer substantially all benefits and risks associated with the assets to the Company are capitalized. An asset and liability equal to the present or fair value, if appropriate, of minimum payments over the term of the leases are recorded. Amortization of the asset is computed using the straight-line method. Expenses associated with all other leases (operating leases) are charged to income as incurred. |
Customer Relationships | Customer Relationships The customer relationships acquired as part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to such relationships on the date of the purchase (see Note 9). The customer relationships are being amortized on a straight-line basis over a four-year estimated life. During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense of $2,806 and $8,418, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at June 30, 2017 was $19,643 and $11,225 at September 30, 2016. | Customer Relationships The customer relationships acquired from the TCS purchase have been recognized in the accompanying consolidated balance sheets at $44,900, the value attributed to it on the date of the purchase (see Note 9). The customer relationships are being amortized on a straight-line basis over a four-year estimated life. During the year ended September 30, 2016, the Company recorded amortization expense of $11,225 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $11,225. Future amortization of customer relationships is estimated to be as follows for the years ended September 30: 2017 $ 11,225 2018 11,225 2019 11,225 $ 33,675 |
Proprietary Content | Proprietary Content The proprietary content acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to such content on the date of the purchase (see Note 9). The proprietary content is being amortized on a straight-line basis over an eight-year estimated life. During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense of $16,410 and $49,230, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at June 30, 2017 was $114,866 and $65,637 at September 30, 2016. | Proprietary Content The proprietary content acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $525,100, the value attributed to it on the date of the purchase (see Note 9). The proprietary content is being amortized on a straight-line basis over an eight-year estimated life. During the year ended September 30, 2016, the Company recorded amortization expense of $65,638 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $65,638. Future amortization of proprietary content is estimated to be as follows for the years ended September 30: 2017 $ 65,638 2018 65,638 2019 65,638 2020 65,638 2021 65,638 Thereafter 131,273 $ 459,463 |
Trade Name | Trade Name The trade name acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to such name on the date of the purchase (see Note 9). Management has determined that the trade name has an indefinite life and does not consider the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of June 30, 2017. | Trade Name The trade name acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $69,300, the value attributed to it on the date of the purchase (see Note 9). Management has determined that the trade name has an indefinite life and does not consider the value of the trade name recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2016. |
Prospect List | Prospect List The prospect list acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $53,800, the value attributed to such list on the date of the purchase (see Note 9). The prospect list is being amortized on a straight-line basis over a one-year estimated life. During the year ended September 30, 2016, the Company recorded the full amortization expense of $53,800 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 31, 2016 was $53,800. | Prospect List The prospect list acquired as a part of the TCS purchase has been recognized in the accompanying consolidated balance sheets at $53,800, the value attributed to it on the date of the purchase (see Note 9). The prospect list is being amortized on a straight-line basis over a one-year estimated life. During the year ended September 30, 2016, the Company recorded the full amortization expense of $53,800 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $53,800. |
Non-compete Agreements | Non-compete Agreements Non-compete agreements entered into as a part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed to such agreements on the date of the purchase (see Note 9). The non-compete agreements are being amortized on a straight-line basis over the five-year term of the non-compete clause of the agreement. During each of the three and nine months ended June 30, 2017 and 2016, the Company recorded amortization expense of $1,315 and $3,945, respectively, on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at June 30, 2017 was $9,205 and $5,260 at September 30, 2016. | Non-compete Agreements Non-compete agreements established as a part of the TCS purchase have been recognized in the accompanying consolidated balance sheets at $26,300, the value attributed to them on the date of the purchase (see Note 9). The non-compete agreements are being amortized on a straight-line basis over the five-year term of the non-compete clause of the agreement. During the year ended September 30, 2016, the Company recorded amortization expense of $5,260 on this intangible asset, which is included in depreciation and amortization expense in the accompanying consolidated statements of operations. Accumulated amortization at September 30, 2016 was $5,260. Future amortization of the non-compete agreements is estimated to be as follows for the years ended September 30: 2017 $ 5,260 2018 5,260 2019 5,260 2020 5,260 $ 21,040 |
Trademarks | Trademarks The Company accounts for trademarks in accordance with GAAP and accordingly, trademarks are stated at cost. Trademarks with indefinite lives are not amortized but are tested for impairment at least annually. Management has determined that the trademarks have an indefinite life and do not consider the value of trademarks recorded in the accompanying consolidated balance sheet to be impaired as of June 30, 2017. | Trademarks The Company accounts for trademarks in accordance with GAAP and accordingly, trademarks are stated at cost. Trademarks with indefinite lives are not amortized but are tested for impairment at least annually. Management has determined that the trademarks have an indefinite life and do not consider the value of trademarks recorded in the accompanying consolidated balance sheet to be impaired as of September 30, 2016 and 2015. |
Goodwill | Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a two-step impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than its carrying value. Management does not consider the value of goodwill recorded for TCS in the accompanying consolidated balance sheet to be impaired as of June 30, 2017, and September 30, 2016. However, goodwill attributed to Cloud9 and MDP was deemed to be impaired during the year ended September 30, 2016 as the assumptions for what those entities would be used for at acquisition had significantly changed and the valuation of those entities during the year did not support the goodwill at acquisition. The fair values of the assets acquired and liabilities assumed were determined primarily using the income approach, which determines the fair value for the asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The fair value of relationships was determined by projecting expected cash flows and subtracting the portion of the cash flow derived by the relevant contributory assets. The accompanying consolidated balance sheets, consolidated statements of operations, changes in stockholders’ equity and cash flows include the results of operations of the acquired subsidiaries from the date of acquisition. | Goodwill Goodwill represents the excess of the value of the purchase price and related costs over the identifiable assets from business acquisitions. The Company conducts an annual impairment assessment, at the reporting unit level, of its recorded goodwill. The Company assesses qualitative factors in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The qualitative factors evaluated by the Company include: macro-economic conditions of the local business environment, overall financial performance, and other entity specific factors as deemed appropriate. If, through this qualitative assessment, the conclusion is made that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, a two-step impairment test is performed. Management determined, by assessing the qualitative factors, that it is more likely than not that the fair value of the reporting unit is greater than its carrying value. Management does not consider the value of goodwill recorded for TCS in the accompanying consolidated balance sheet to be impaired as of September 30, 2016, and 2015. However, goodwill attributed to Cloud9 and MDP was deemed to be impaired as that business offering has been discontinued. The fair values of the assets acquired and liabilities assumed were determined primarily using the income approach, which determines the fair value for the asset based on the present value of cash flows projected to be generated by the asset. Projected cash flows are discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The fair value of relationships were determined by projecting expected cash flows and subtracting the portion of the cash flow derived by the relevant contributory assets. The accompanying consolidated balance sheets, consolidated statements of operations, changes in stockholders’ equity and cash flows include the results of operations of the acquired subsidiaries from the date of acquisition. Goodwill consists of the following: Goodwill at September 30, 2014 $ – Goodwill generated from acquisition of Cloud9 (see note 9) 592,369 Goodwill generated from acquisition of MDP (see note 9) 70,598 Goodwill at September 30, 2015 662,967 Goodwill generated from acquisition of TCS (see note 9) 1,094,702 Impairment of Cloud9 (592,369 ) Impairment of MDP (70,598 ) Goodwill at September 30, 2016 $ 1,094,702 |
Income Taxes | Income Taxes The Company accounts for Federal and state income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There was no accrued interest or penalties as of June 30, 2017 and September 30, 2016. From time to time, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s Federal returns since 2014 are still subject for examination by taxing authorities. | Income Taxes The Company accounts for Federal and state income taxes pursuant to GAAP, which requires an asset and liability approach for financial accounting and reporting for income taxes based on tax effects of differences between the financial statement and tax basis of assets and liabilities. The Company accounts for all uncertain tax positions in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 740 – Income Taxes (“ASC 740”). ASC 740 provides guidance on de-recognition, classification, interest and penalties and disclosure related to uncertain income tax positions. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. There was no accrued interest or penalties as of September 30, 2016 and 2015. From time to time, the Company is audited by taxing authorities. These audits could result in proposed assessments of additional taxes. The Company believes that its tax positions comply in all material respects with applicable tax law. However, tax law is subject to interpretation, and interpretations by taxing authorities could be different from those of the Company, which could result in the imposition of additional taxes. The Company’s Federal returns since 2014 are still subject for examination by taxing authorities. |
Earnings Per Share | Losses Per Share Basic earnings per common share is computed by dividing net losses available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Average number of common shares were 34,973,013 and 31,990,466 for the three months ended June 30, 2017 and 2016, respectively. Average number of common shares were 35,383,552 and 32,913,403 for the nine months ended June 30, 2017 and 2016, respectively. For the nine months ended June 30, 2017 and 2016, approximately 2,340,171 and 2,200,346 shares of common stock underlying options and warrants, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. | Earnings Per Share Basic earnings per common share is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the reporting period. Average number of common shares were 31,626,189 and 24,769,739 for years ended September 31, 2016 and 2015, respectively. For the years ended September 30, 2016 and 2015, approximately 2,200,346 and 1,500,996 common stock options, respectively, were not added to the diluted average shares because inclusion of such shares would be antidilutive. |
Revenue Recognition | Revenue Recognition FG Wealth generates investment management fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage client investments. FG Tax and MDP generate service income from consulting and other professional services performed. Commission revenue is derived from the sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized at the time the policy is issued. Revenue represents gross billings less discounts, and is calculated net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets. Tax Coach Software has 3 types of services that are charged and collected on a month to month subscription basis (Tax Coach basic membership, All-Stars coaching, and Wire Service weekly broadcast email). None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships. | Revenue Recognition FG Wealth generates investment management fees for services provided by the Company. Investment management fees include fees earned from assets under management by providing professional services to manage client investments. FG Tax and MDP generate service income from its consulting and other professional services performed. Commission revenue is derived from the sale of annuities and premiums on life insurance policies held by third parties. The revenue is recognized at the time the policy is issued. Revenue represents gross billings less discounts, and are net of sales taxes, as applicable. Amounts invoiced for work not yet completed are shown as deferred revenue in the accompanying consolidated balance sheets. TaxCoach Software has 3 types of services that are charged and collected on a month to month subscription basis (TaxCoach basic membership, All-Stars coaching, and Wire Service weekly broadcast email). None of these programs come with a long-term commitment or contract, and there is no up-front payment beyond the monthly subscription fee. Cancellations are processed within the month requested and memberships are closed at the end of the period for which the most recent payment was made. Members are not entitled to refunds for unused memberships. |
Advertising | Advertising Advertising costs are charged to operations when incurred. Advertising and marketing expense was $131,508 and $106,922 for the three months ended June 30, 2017 and 2016, respectively; and $307,977 and $298,385 for the nine months ended June 30, 2017 and 2016, respectively. | Advertising Advertising costs are charged to operations when incurred. Advertising and marketing expense was $402,402 and $232,904 for the years ended September 30, 2016 and 2015, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk-free rate from 0.97% in 2016 and 1.15% in 2017, dividend yield of 0%, expected life of 2 years and volatility of 1.00. | Stock-Based Compensation The Company recognizes the fair value of the stock-based compensation awards as wages in the accompanying statements of operations on a straight-line basis over the vesting period based on the Black-Scholes option pricing model based on a risk free rate from 0.70% in 2015 and 0.97% in 2016, dividend yield of 0%, expected life of 2 years and volatility of 1.00. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. The Company is actively seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt, or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders, and incurring additional indebtedness could involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the Company will need to manage additional asset units under contract and/or additional financing to fully implement its business plan, including continued growth and establishment of a stronger brand. The Company is actively seeking growth of its service offerings, both organically and via new client relationships. Management, in the ordinary course of business, is trying to raise additional capital through sales of common stock as well as seeking financing via equity or debt, or both from third parties. There are no assurances that additional financing will be available on favorable terms, or at all. If additional financing is not available, the Company will need to reduce, defer or cancel development programs, planned initiatives and overhead expenditures. The failure to adequately fund its capital requirements could have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the sale of additional equity securities to raise financing will result in additional dilution to the Company’s stockholders, and incurring additional indebtedness could involve an increased debt service cash obligation, the imposition of covenants that restrict the Company’s operations or the Company’s ability to perform on its current debt service requirements. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Future Accounting Pronouncements | Future Accounting Pronouncements In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, part of the FASB’s simplification initiative. ASU 2015-17 requires companies to classify deferred tax liabilities and assets as noncurrent. ASU 2015-17 is effective for fiscal years beginning after December 15, 2018. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In February 2016, the FASB issued ASU Update No. 2016-02 Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases to be recognized on the balance sheet. ASU 2016-02 is effective for the years beginning after December 15, 2018 and for all periods presented. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2016, the FASB issued ASU Update No. 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2016-07 is effective for the years beginning after December 15, 2016. Early application of the amendments in this ASU is permitted. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2016, the FASB issued ASU Update No. 2016-08, Revenue From Contracts with Customers (Topic 606). The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying the criteria in determining a principal versus agent relationship. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following five steps: (1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity satisfies performance obligations. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently evaluating what impact adoption of this guidance will have on our financial position, results of operations, cash flows and disclosures. The Company does not expect any significant financial impact to the financial statements upon adoption of this standard. In March 2016, the FASB issued ASU Update No. 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update are to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has yet to do a full analysis on the impact this will have but will do during the next fiscal year. | Future Accounting Pronouncements In April 2015, the FASB issued ASU No. 2015-15, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, part of the FASB’s simplification initiative. ASU 2015-15 requires companies to present debt issuance costs the same way they currently present debt discounts, as a direct deduction from the carrying value of that debt liability. ASU 2015-15 does not impact the recognition and measurement guidance for debt issuance costs. ASU 2015-15 is effective for fiscal years beginning after December 15, 2015. In November 2015, the FASB issued ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, part of the FASB’s simplification initiative. ASU 2015-17 requires companies to classify deferred tax liabilities and assets as noncurrent. ASU 2015-17 is effective for fiscal years beginning after December 15, 2018. In February 2016, the FASB issued ASU Update No. 2016-02, Leases (Topic 842). Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet - the new ASU will require both types of leases to be recognized on the balance sheet. ASU 2016-02 is effective for the years beginning after December 15, 2018 and for all periods presented. Early application of the amendments in this ASU is permitted. In March 2016, the FASB issued ASU Update No. 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. ASU 2016-07 is effective for the years beginning after December 15, 2016. Early application of the amendments in this ASU is permitted. In March 2016, the FASB issued ASU Update No. 2016-08, Revenue From Contracts with Customers (Topic 606). The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by clarifying the criteria in determining a principal versus agent relationship. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, an entity should apply the following five steps: (1) identify contracts with customers, (2) identify the performance obligations in the contracts, (3) determine the transaction price, (4) allocate the transaction price to the performance obligation in the contract, and (5) recognize revenue as the entity satisfies performance obligations. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. We are currently evaluating what impact adoption of this guidance will have on our financial position, results of operations, cash flows and disclosures. In March 2016, the FASB issued ASU Update No. 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update are to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has yet to do a full analysis on the impact this will have but will do during the next fiscal year. |
1. Summary of Significant Acc22
1. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2016 | |
Schedule of goodwill | Goodwill at September 30, 2014 $ – Goodwill generated from acquisition of Cloud9 (see note 9) 592,369 Goodwill generated from acquisition of MDP (see note 9) 70,598 Goodwill at September 30, 2015 662,967 Goodwill generated from acquisition of TCS (see note 9) 1,094,702 Impairment of Cloud9 (592,369 ) Impairment of MDP (70,598 ) Goodwill at September 30, 2016 $ 1,094,702 |
Customer Relationships [Member] | |
Future amortization of customer relationships | 2017 $ 11,225 2018 11,225 2019 11,225 $ 33,675 |
Proprietary Content [Member] | |
Future amortization of customer relationships | 2017 $ 65,638 2018 65,638 2019 65,638 2020 65,638 2021 65,638 Thereafter 131,273 $ 459,463 |
Noncompete Agreements [Member] | |
Future amortization of customer relationships | 2017 $ 5,260 2018 5,260 2019 5,260 2020 5,260 $ 21,040 |
2. Property and Equipment (Tabl
2. Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment | Estimated June 30, September 30, Furniture and fixtures 5 years $ 9,703 $ 6,994 Internally developed software 10 years 152,000 152,000 161,703 158,994 Less accumulated depreciation and amortization 29,314 17,914 $ 132,389 $ 141,080 | Estimated 2016 2015 Furniture and fixtures 5 years $ 6,994 $ 6,928 Internally developed software 10 years 152,000 – 158,994 6,928 Less accumulated depreciation and amortization 17,914 289 $ 141,080 $ 6,639 |
3. Trademarks (Tables)
3. Trademarks (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Schedule of trademarks | Trademarks at September 30, 2015 $ 20,174 Trademarks purchased at cost 2,418 Trademarks at September 30, 2016 22,592 Trademarks purchased at cost 50 Trademarks at June 30, 2017 $ 22,642 | Trademarks at September 30, 2014 $ – Trademarks purchased from related party at cost 16,272 Trademarks purchased at cost 3,902 Trademarks at September 30, 2015 20,174 Trademarks purchased at cost 2,418 Trademarks at September 30, 2016 $ 22,592 |
6. Accrued Expenses (Tables)
6. Accrued Expenses (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Payables and Accruals [Abstract] | ||
Schedule of accrued expenses | June 30, September 30, 2016 Accrued payroll $ 45,627 $ 44,327 Accrued operating expenses 85,155 59,077 Deferred rent 250 7 $ 131,032 $ 103,654 | 2016 2015 Accrued payroll $ 44,327 $ 35,778 Accrued operating expenses 59,077 7,615 Deferred rent 250 3,007 $ 103,654 $ 46,400 |
7. Income Taxes (Tables)
7. Income Taxes (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||
Schedule of income tax rates | 2016 2015 Tax benefit calculated at statutory rate 35% 35% Changes to valuation allowance (35% ) (35% ) Provision for income taxes 0% 0% | |
Schedule of deferred taxes | June 30, September 30, Net non-current deferred tax assets: Net operating loss carry-forward $ 1,336,430 $ 924,304 Net non-current deferred tax liabilities: Intangible assets 11,957 109,471 Net 1,324,743 814,833 Less valuation allowance (1,324,743 ) (814,833 ) Net deferred taxes $ – $ – | 2016 2015 Net non-current deferred tax assets: Net operating loss carry-forward $ 924,304 $ 330,359 Net non-current deferred tax liabilities: Intangible assets 109,471 – Net 814,833 330,359 Less valuation allowance (814,833 ) (330,359 ) Net deferred taxes $ – $ – |
8. Commitments, Contingencies27
8. Commitments, Contingencies and Concentrations (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule of minimum lease payments | 2017 $ 17,100 2018 68,400 2019 5,700 $ 91,200 | 2017 $ 81,902 2018 68,400 2019 5,700 $ 156,002 |
9. Business Acquisitions (Table
9. Business Acquisitions (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Schedule of assets acquired and liabilities assumed | The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 57,025 Accounts receivable 15,476 Accounts receivable - other 5,408 Internally developed software 152,000 Total tangible assets 229,909 Liabilities assumed: Accrued expenses 69,485 Note payable 69,906 Total liabilities 139,391 Net acquired assets $ 90,518 | |
Proforma financials for acquisition | As Reported Cloud9 BLI PAG MDP TCS Pro Forma FY 2015 10/1/14 - 10/1/14 - 10/1/14 - 10/1/14 - 10/1/14 - FY 2015 Total Revenue $ 1,309,801 $ 61,800 $ 340,403 $ 222,925 $ 102,550 $ 860,805 $ 2,898,284 Net (Loss) / Income $ (943,884 ) $ (9,024 ) $ (52,446 ) $ 62,548 $ 12,468 $ 395,007 $ (535,331 ) | |
Schedule of fair value allocation of acquisition | Common stock issued in stock exchange at a value of $0.25 per share (as amended) $ 1,500,020 Additional paid in capital for the escrow agreement provision 404,600 Total value of the goodwill generated on acquisition 1,904,620 Intangible assets acquired (719,400 ) Net tangible assets acquired (90,518 ) Total assets acquired (809,918 ) Total fair value of acquisition $ 1,094,702 | |
Schedule of intangible assets acquired | The intangible assets were as follows: Customer relationships $ 44,900 Proprietary content 525,100 Trade name 69,300 Prospect list 53,800 Non-compete agreements 26,300 Total intangible assets $ 719,400 | |
Cloud9 [Member] | ||
Schedule of assets acquired and liabilities assumed | The transaction resulted in recording liabilities and goodwill at a fair value of $154,215 as follows: Common stock issued in stock exchange $ 438,159 Net liabilities assumed 154,210 Total value of the goodwill generated on acquisition $ 592,369 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 30,840 Accounts receivable 22,039 Prepaid expenses and deposits 7,000 Total tangible assets 59,879 Liabilities assumed: Accounts payable 30,407 Accounts payable - intercompany eliminated upon consolidation 51,000 Accounts payable - related party 132,682 Total liabilities 214,089 Net acquired liabilities $ (154,210 ) | |
Business Legacy and Pollock Advisory Group [Member] | ||
Schedule of assets acquired and liabilities assumed | The transaction resulted in recording a gain on bargain purchase of $33,816 as follows: Net assets acquired $ 33,186 Total gain on bargain purchase generated at acquisition $ 33,816 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 22,350 Accounts receivable 73,321 Accounts receivable - related party 9,272 Prepaid expenses 19,028 Fixed assets 32,316 Total tangible assets 156,287 Liabilities assumed: Accounts payable 15,505 Accrued expenses 22,383 Line of credit 55,000 Capital lease obligations 29,583 Total liabilities 122,471 Net acquired assets $ 33,816 | |
Metro Data Processing [Member] | ||
Schedule of assets acquired and liabilities assumed | MDP, located in Tulsa, Oklahoma, provides payroll services, software, and support solutions to business owners. The transaction resulted in recording assets and goodwill at a fair value of $70,598 as follows: Cash consideration $ 75,800 Less: net assets acquired (5,202 ) Total value of the goodwill generated on acquisition $ 70,598 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 4,121 Accounts receivable 2,903 Accounts receivable - other 5,800 Total tangible assets 12,824 Liabilities assumed: Accounts payable 7,622 Total liabilities 7,622 Net acquired assets $ 5,202 | |
Tax Coach Software [Member] | ||
Schedule of assets acquired and liabilities assumed | The transaction resulted in a fair value of the acquisition of $1,094,702 as follows: Common stock issued in stock exchange at a value of $0.25 per share (as amended) $ 1,500,020 Additional paid in capital for the escrow agreement provision 404,600 Total value of the goodwill generated on acquisition 1,904,620 Intangible assets acquired (719,400 ) Net tangible assets acquired (90,518 ) Total assets acquired (809,918 ) Total fair value of acquisition $ 1,094,702 The intangible assets were as follows: Customer relationships $ 44,900 Proprietary content 525,100 Trade name 69,300 Prospect list 53,800 Non-compete agreements 26,300 Total intangible assets $ 719,400 The tangible assets acquired and liabilities assumed were as follows: Assets acquired: Cash $ 57,025 Accounts receivable 15,476 Accounts receivable - other 5,408 Internally developed software 152,000 Total tangible assets 229,909 Liabilities assumed: Accrued expenses 69,485 Line of credit 69,906 Total liabilities 139,391 Net acquired assets $ 90,518 |
11. Stock Option Plan (Tables)
11. Stock Option Plan (Tables) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Schedule of option activity | Shares Value of Weighted Weighted Outstanding - September 30, 2015 1,500,996 $ 7,359 $ 0.33 Granted 1,024,400 $ 19,677 1.00 102 months Exercised – – – – Canceled or expired 325,050 $ 4,907 0.33 – Outstanding - September 30, 2016 2,200,346 $ 22,129 0.64 101 months Granted 32,000 $ 11,532 1.94 114 months Exercised – – Canceled or expired – – Outstanding - December 31, 2016 2,232,346 $ 33,661 Exercisable - December 31, 2016 2,200,346 0.64 97 months Granted 37,600 $ – 1.19 116 months Exercised – – – Canceled or expired – – – Outstanding - March 31, 2017 2,269,946 $ – Exercisable - March 31, 2017 2,215,379 0.64 100 months Granted 19,800 $ – 1.19 116 months Exercised – – – Canceled or expired 37,600 – 1.19 Outstanding - June 30, 2017 2,252,146 $ – Exercisable - June 30, 2017 2,215,171 0.65 100 months | 2016 2015 Shares Value of Weighted Weighted Shares Value of Weighted Weighted Outstanding - beginning of year 1,500,996 $ 7,359 $ 0.33 – $ – – Granted 1,024,400 $ 19,677 1.00 111 months 1,520,196 $ 7,649 0.33 119 months Exercised – – – – – – Canceled or expired 325,050 $ 4,907 0.33 – 19,200 $ 290 0.33 – Outstanding - end of year 2,200,346 $ 22,129 0.64 109 months 1,500,996 0.33 119 months Exercisable - end of year 2,200,346 0.64 109 months – – – |
1. Summary of Significant Acc30
1. Summary of Significant Accounting Policies (Details - Amortization) | Sep. 30, 2016USD ($) |
Customer Relationships [Member] | |
Future amortization, 2017 | $ 11,225 |
Future amortization, 2018 | 11,225 |
Future amortization, 2019 | 11,225 |
Future amortization | 33,675 |
Proprietary Content [Member] | |
Future amortization, 2017 | 65,638 |
Future amortization, 2018 | 65,638 |
Future amortization, 2019 | 65,638 |
Future amortization, 2020 | 65,638 |
Future amortization, 2021 | 65,638 |
Future amortization, thereafter | 131,273 |
Future amortization | 459,463 |
Noncompete Agreements [Member] | |
Future amortization, 2017 | 5,260 |
Future amortization, 2018 | 5,260 |
Future amortization, 2019 | 5,260 |
Future amortization, 2020 | 5,260 |
Future amortization | $ 21,040 |
1. Summary of Significant Acc31
1. Summary of Significant Accounting Policies (Details - Goodwill) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill, beginning balance | $ 662,967 | $ 0 |
Impairment of goodwill | (662,967) | 0 |
Goodwill, ending balance | 1,094,702 | 662,967 |
Cloud9 [Member] | ||
Goodwill acquired | 592,369 | |
Impairment of goodwill | (592,369) | |
Metro Data Processing [Member] | ||
Goodwill acquired | $ 70,598 | |
Impairment of goodwill | (70,598) | |
Tax Coach Software [Member] | ||
Goodwill acquired | $ 1,094,702 |
1. Summary of Significant Acc32
1. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Indefinite lived trade name | $ 69,300 | $ 69,300 | $ 69,300 | $ 0 | ||
Advertising and marketing expense | $ 402,402 | $ 232,904 | ||||
Risk free interest rate | 0.97% | 1.15% | 0.97% | 0.70% | ||
Dividend yield | 0.00% | 0.00% | ||||
Expected life | 2 years | 1 year | ||||
Volatility rate | 100.00% | 1.00% | ||||
Weighted average number of shares outstanding | 34,973,013 | 31,990,466 | 35,383,552 | 32,913,403 | 31,626,189 | 24,769,739 |
Antidilutive shares excluded from computation of EPS | 2,340,171 | 2,200,346 | 2,200,346 | 1,500,996 | ||
Prospect List [Member] | ||||||
Finite lived intangible assets | $ 53,800 | $ 53,800 | ||||
Accumulated amortization | 53,800 | 53,800 | $ 53,800 | |||
Noncompete Agreements [Member] | ||||||
Finite lived intangible assets | 26,300 | 26,300 | ||||
Accumulated amortization | 9,205 | 9,205 | 5,260 | |||
Customer Relationships [Member] | ||||||
Accumulated amortization | 19,643 | 19,643 | 11,225 | |||
Proprietary Content [Member] | ||||||
Finite lived intangible assets | 525,100 | 525,100 | ||||
Accumulated amortization | $ 114,866 | $ 114,866 | 65,637 | |||
Tax Coach Software [Member] | Prospect List [Member] | ||||||
Finite lived intangible assets | 53,800 | |||||
Amortization expense | 53,800 | |||||
Accumulated amortization | 53,800 | |||||
Tax Coach Software [Member] | Noncompete Agreements [Member] | ||||||
Finite lived intangible assets | 26,300 | |||||
Amortization expense | 5,260 | |||||
Accumulated amortization | 5,260 | |||||
Tax Coach Software [Member] | Customer Relationships [Member] | ||||||
Finite lived intangible assets | 44,900 | |||||
Amortization expense | 11,225 | |||||
Accumulated amortization | 11,225 | |||||
Tax Coach Software [Member] | Proprietary Content [Member] | ||||||
Finite lived intangible assets | 525,100 | |||||
Amortization expense | 65,638 | |||||
Accumulated amortization | 65,638 | |||||
Tax Coach Software [Member] | Trade Names [Member] | ||||||
Indefinite lived trade name | $ 69,300 |
2. Property and Equipment (Deta
2. Property and Equipment (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property and equipment, gross | $ 161,703 | $ 158,994 | |
Accumulated depreciation and amortization | 29,314 | 17,914 | $ 289 |
Property and equipment, net | 132,389 | 141,080 | 6,639 |
Furniture and Fixtures [Member] | |||
Property and equipment, gross | $ 9,703 | $ 6,994 | 6,928 |
Estimated service lives | 5 years | 5 years | |
Software Development [Member] | |||
Property and equipment, gross | $ 152,000 | $ 152,000 | $ 0 |
Estimated service lives | 10 years | 10 years |
2. Property and Equipment (De34
2. Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 3,800 | $ 3,800 | $ 11,400 | $ 11,400 | $ 17,625 | $ 289 |
3. Trademarks (Details)
3. Trademarks (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Trademarks, beginning balance | $ 20,174 | |
Trademarks, ending balance | 22,592 | $ 20,174 |
Trademarks [Member] | ||
Trademarks, beginning balance | 20,174 | 0 |
Trademark purchased from related party | 16,272 | |
Trademarks purchased | 2,418 | 3,902 |
Trademarks, ending balance | $ 22,592 | $ 20,174 |
4. Line of Credit (Details Narr
4. Line of Credit (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Line of credit, amount outstanding | $ 18,481 | $ 19,732 | $ 0 |
Wells Fargo [Member] | |||
Line of credit maximum amount | $ 55,000 | $ 55,000 | |
Line of credit interest rate | 7.50% | 7.50% | |
Line of credit, amount outstanding | $ 18,481 | $ 19,732 |
5. Notes Payable (Details Narra
5. Notes Payable (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2015 | |
Note payable, amount outstanding | $ 93,397 | $ 132,408 | $ 0 |
Huntington National Bank [Member] | |||
Line of credit maximum amount | $ 100,000 | ||
Interest rate terms | Prime plus 1.25% | ||
Debt maturity date | Feb. 28, 2017 |
6. Accrued Expenses (Details)
6. Accrued Expenses (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Payables and Accruals [Abstract] | |||
Accrued payroll | $ 45,627 | $ 44,327 | $ 35,778 |
Accrued operating expenses | 85,155 | 59,077 | 7,615 |
Deferred rent | 250 | 250 | 3,007 |
Total accrued expenses | $ 131,032 | $ 103,654 | $ 46,400 |
7. Income Taxes (Details - Tax
7. Income Taxes (Details - Tax rates) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||||
Tax benefit calculated at statutory rate | 35.00% | 35.00% | ||||
Changes to valuation allowance | (35.00%) | (35.00%) | ||||
Provision for income taxes | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
7. Income Taxes (Details - Defe
7. Income Taxes (Details - Deferred taxes) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Net non-current deferred tax assets: | |||
Net operating loss carry-forward | $ 1,336,430 | $ 924,304 | $ 330,359 |
Net non-current deferred tax liabilities: | |||
Intangible assets | 11,957 | 109,471 | 0 |
Net | 1,324,743 | 814,833 | 330,359 |
Less valuation allowance | (1,324,743) | (814,833) | (330,359) |
Net deferred taxes | $ 0 | $ 0 | $ 0 |
7. Income Taxes (Details Narrat
7. Income Taxes (Details Narrative) | 12 Months Ended |
Sep. 30, 2016USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryover | $ 3,079,023 |
NOL beginning expiration date | Dec. 31, 2035 |
8. Commitments, Contingencies42
8. Commitments, Contingencies and Concentrations (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Future lease commitment, 2017 | $ 81,902 | |
Future lease commitment, 2018 | $ 68,400 | 68,400 |
Future lease commitment, 2019 | 5,700 | 5,700 |
Future lease commitment | $ 91,200 | $ 156,002 |
8. Commitments, Contingencies43
8. Commitments, Contingencies and Concentrations (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Rent expense | $ 22,887 | $ 19,481 | $ 45,088 | $ 39,717 | $ 89,150 | $ 86,149 |
Payment for deposit | $ 0 | $ (50,000) | 0 | 50,000 | ||
Deposit forfeited | $ 50,000 | $ 0 |
9. Business Acquisitions (Detai
9. Business Acquisitions (Details - Acquisitions) - USD ($) | 12 Months Ended | |||||||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2017 | Oct. 02, 2015 | Aug. 12, 2015 | Jan. 01, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Goodwill | $ 1,094,702 | $ 662,967 | $ 1,094,702 | $ 0 | ||||
Cloud9 [Member] | ||||||||
Stock issued for acquisition, shares | 1,314,477 | |||||||
Common stock issued in stock exchange | $ 438,159 | |||||||
Net assets acquired/ net liabilities assumed | $ (154,210) | |||||||
Goodwill | 592,369 | |||||||
Assets acquired: | ||||||||
Cash | 30,840 | |||||||
Accounts receivable | 22,039 | |||||||
Prepaid expenses and deposits | 7,000 | |||||||
Total tangible assets | 59,879 | |||||||
Liabilities assumed: | ||||||||
Accounts payable | 30,407 | |||||||
Accounts payable - intercompany eliminated upon consolidation | 51,000 | |||||||
Accounts payable - related party | 132,682 | |||||||
Total liabilities | 214,089 | |||||||
Net acquired assets/liabilities | $ (154,210) | |||||||
Business Legacy and Pollock Advisory Group [Member] | ||||||||
Net assets acquired/ net liabilities assumed | $ 26,316 | |||||||
Total gain on bargain purchase generated at acquisition | 26,316 | |||||||
Assets acquired: | ||||||||
Cash | 22,350 | |||||||
Accounts receivable | 73,321 | |||||||
Accounts receivable - related party | 9,272 | |||||||
Prepaid expenses and deposits | 11,528 | |||||||
Fixed assets | 32,316 | |||||||
Total tangible assets | 148,787 | |||||||
Liabilities assumed: | ||||||||
Accounts payable | 15,505 | |||||||
Accrued expenses | 22,383 | |||||||
Line of credit | 55,000 | |||||||
Capital lease obligations | 29,583 | |||||||
Total liabilities | 122,471 | |||||||
Net acquired assets/liabilities | $ 26,316 | |||||||
Metro Data Processing [Member] | ||||||||
Cash consideration | $ 75,800 | |||||||
Net assets acquired/ net liabilities assumed | $ 5,202 | |||||||
Goodwill | 70,598 | |||||||
Assets acquired: | ||||||||
Cash | 4,121 | |||||||
Accounts receivable | 2,903 | |||||||
Accounts receivable - other | 5,800 | |||||||
Total tangible assets | 12,824 | |||||||
Liabilities assumed: | ||||||||
Accounts payable | 7,622 | |||||||
Total liabilities | 7,622 | |||||||
Net acquired assets/liabilities | $ 5,202 | |||||||
Tax Coach Software [Member] | ||||||||
Stock issued for acquisition, shares | 6,000,000 | |||||||
Common stock issued in stock exchange | $ 1,500,020 | |||||||
Additional paid in capital for the escrow agreement provision | 404,600 | |||||||
Intangible assets acquired | $ 719,400 | |||||||
Net assets acquired/ net liabilities assumed | 90,518 | |||||||
Goodwill | 1,904,620 | |||||||
Total assets acquired | 809,918 | |||||||
Fair value of acquisition | $ 1,094,702 | |||||||
Assets acquired: | ||||||||
Cash | 57,025 | |||||||
Accounts receivable | 15,476 | |||||||
Accounts receivable - other | 5,408 | |||||||
Internally developed software | 152,000 | |||||||
Total tangible assets | 229,909 | |||||||
Liabilities assumed: | ||||||||
Accrued expenses | 69,485 | |||||||
Line of credit | 69,906 | |||||||
Total liabilities | 139,391 | |||||||
Net acquired assets/liabilities | 90,518 | |||||||
Tax Coach Software [Member] | Trade Names [Member] | ||||||||
Intangible assets acquired | 69,300 | |||||||
Tax Coach Software [Member] | Customer Relationships [Member] | ||||||||
Intangible assets acquired | 44,900 | |||||||
Tax Coach Software [Member] | Proprietary Content [Member] | ||||||||
Intangible assets acquired | 525,100 | |||||||
Tax Coach Software [Member] | Prospect List [Member] | ||||||||
Intangible assets acquired | 53,800 | |||||||
Tax Coach Software [Member] | Noncompete Agreements [Member] | ||||||||
Intangible assets acquired | $ 26,300 |
9. Business Acquisitions (Det45
9. Business Acquisitions (Details - Pro Forma) - USD ($) | 3 Months Ended | 9 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2014 | Jun. 30, 2017 | Jun. 30, 2016 | Aug. 11, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | $ 819,419 | $ 695,024 | $ 2,560,113 | $ 1,935,511 | $ 2,756,999 | $ 1,309,801 | ||
Net income (loss) | $ (375,291) | $ (342,184) | $ (720,502) | $ (1,156,040) | $ (2,135,139) | (943,884) | ||
Scenario, Previously Reported [Member] | ||||||||
Revenues | 1,309,801 | |||||||
Net income (loss) | (943,884) | |||||||
Pro Forma [Member] | ||||||||
Revenues | 2,898,284 | |||||||
Net income (loss) | (535,331) | |||||||
Pro Forma [Member] | Cloud9 [Member] | ||||||||
Revenues | $ 61,800 | |||||||
Net income (loss) | (9,024) | |||||||
Pro Forma [Member] | Business Legacy, Inc. [Member] | ||||||||
Revenues | 340,403 | |||||||
Net income (loss) | (52,446) | |||||||
Pro Forma [Member] | Pollock Advisory Group [Member] | ||||||||
Revenues | 222,925 | |||||||
Net income (loss) | $ 62,548 | |||||||
Pro Forma [Member] | Metro Data Processing [Member] | ||||||||
Revenues | $ 102,550 | |||||||
Net income (loss) | $ 12,468 | |||||||
Pro Forma [Member] | Tax Coach Software [Member] | ||||||||
Revenues | 860,805 | |||||||
Net income (loss) | $ 395,007 |
9. Business Acquisitions (Det46
9. Business Acquisitions (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill impairment | $ 662,967 | $ 0 |
Cloud9 [Member] | ||
Stock issued for acquisition, shares | 1,314,477 | |
Goodwill impairment | 592,369 | |
Metro Data Processing [Member] | ||
Goodwill impairment | $ 70,598 | |
Tax Coach Software [Member] | ||
Stock issued for acquisition, shares | 6,000,000 |
10. Stockholders' Equity (Detai
10. Stockholders' Equity (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock split description | Effective October 20, 2015, Financial Gravity Holdings declared a three for one stock split of its common stock. Upon the stock split, every one share of common stock issued and outstanding was automatically reclassified and converted into three shares of common stock. The common stock retained a par value of $0.00001 per share. | ||
Non-employee Directors [Member] | |||
Stock issued for services, shares | 300,000 | ||
Founding Member [Member] | |||
Stock returned, shares | 2,926,294 | ||
Common Stock [Member] | |||
Stock issued new, shares | 675,000 | 21,150,000 | |
Private Placement [Member] | |||
Common stock issued under a private placement memorandum, shares | 785,000 | 5,625,000 | |
Additional paid in capital | $ 535,000 | $ 1,875,000 | |
Stock issued new, shares | 785,000 | 5,625,000 |
11. Stock Option Plan (Details)
11. Stock Option Plan (Details) - Options [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Number of Options | |||||
Options outstanding, beginning balance | 2,269,946 | 2,232,346 | 2,200,346 | 1,500,996 | 0 |
Options granted | 19,800 | 37,600 | 32,000 | 1,024,400 | 1,520,196 |
Options exercised | 0 | 0 | |||
Options cancelled or expired | 37,600 | 325,050 | 19,200 | ||
Options outstanding, ending balance | 2,252,146 | 2,269,946 | 2,232,346 | 2,200,346 | 1,500,996 |
Options exercisable | 2,215,171 | 2,215,379 | 2,200,346 | 2,200,346 | 0 |
custom:ValueOfSharesUnderOptionsAbstract | |||||
Options outstanding, beginning balance | $ 0 | $ 33,661 | $ 22,129 | $ 7,359 | |
Options granted | 11,532 | 19,677 | $ 7,649 | ||
Options exercised | |||||
Options cancelled or expired | 4,907 | 290 | |||
Options outstanding, ending balance | $ 0 | $ 0 | $ 33,661 | $ 22,129 | $ 7,359 |
Weighted average exercise price | |||||
Weighted average exercise price, options outstanding, beginning balance | $ 0.64 | $ .33 | |||
Weighted average exercise price, options granted | $ 1.19 | $ 1.19 | 1.94 | 1 | $ .33 |
Weighted average exercise price, options exercised | |||||
Weighted average exercise price, options cancelled or expired | 1.19 | 0.33 | .33 | ||
Weighted average exercise price, options outstanding, ending balance | 0.64 | $ .33 | |||
Weighted average exercise price, options exercisable | $ 0.65 | $ 0.64 | $ 0.64 | $ .64 | |
Weighted average remaining contractual life | |||||
Weighted average remaining contractual life, options granted | 116 months | 116 months | 114 months | 111 months | 119 months |
Weighted average remaining contractual life, options outstanding | 109 months | 119 months | |||
Weighted average remaining contractual life, options exercisable | 100 months | 100 months | 97 months | 109 months |
11. Stock Option Plan (Details
11. Stock Option Plan (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2016 | Jun. 30, 2017 | |
Share based compensation | $ 22,715 | |
2015 Stock Option Plan [Member] | ||
Maximum shares allowed under plan | 9,000,000 | 9,000,000 |
12. Related Party Transactions
12. Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounts receivable trade due from related party | $ 0 | $ 27,267 | ||||
Accounts receivable - related party | $ 4,506 | $ 4,506 | 4,506 | 29,326 | ||
Accounts payable - related party | 0 | 2,300 | ||||
Management fees | 50,000 | $ 50,000 | 153,000 | $ 163,333 | 213,333 | 155,657 |
General and admin expenses | 107,669 | 106,845 | 384,477 | 291,263 | 408,537 | 411,235 |
Majority Stockholder [Member] | ||||||
Accounts receivable - related party | 4,506 | 4,506 | 4,506 | 2,059 | ||
Management fees | 50,000 | 50,000 | 153,000 | 163,333 | 213,333 | 155,657 |
Stockholder [Member] | ||||||
Accounts payable - related party | 0 | 2,300 | ||||
Board member and Stockholder [Member] | ||||||
General and admin expenses | $ 0 | $ 15,000 | $ 9,000 | $ 40,000 | $ 49,000 | $ 9,020 |
1. Summary of Significant Acc51
1. Summary of Significant Accounting Policies (June 2017) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | |||
Weighted average common shares outstanding | 34,973,013 | 31,990,466 | 35,383,552 | 32,913,403 | 31,626,189 | 24,769,739 |
Antidilutive shares | 2,340,171 | 2,200,346 | 2,200,346 | 1,500,996 | ||
Advertising expense | $ 131,508 | $ 106,922 | $ 307,977 | $ 298,385 | ||
Share-based compensation assumptions | ||||||
Risk free interest rate | 0.97% | 1.15% | 0.97% | 0.70% | ||
Dividend yield | 0.00% | 0.00% | ||||
Expected life | 2 years | 1 year | ||||
Volatility | 100.00% | 1.00% | ||||
Trade Names [Member] | ||||||
Indefinite lived intangible asset gross | 69,300 | $ 69,300 | ||||
Impairment of intangible assets | 0 | 0 | ||||
Customer Relationships [Member] | ||||||
Intangible estimated life | 4 years | |||||
Amortization expense | 2,806 | 2,806 | $ 8,418 | $ 8,418 | ||
Accumulated amortization | 19,643 | 19,643 | $ 11,225 | |||
Proprietary Content [Member] | ||||||
Finite lived intangible asset gross | $ 525,100 | 525,100 | ||||
Intangible estimated life | 8 years | |||||
Amortization expense | $ 16,410 | 16,410 | 49,230 | 49,230 | ||
Accumulated amortization | 114,866 | 114,866 | 65,637 | |||
Prospect List [Member] | ||||||
Finite lived intangible asset gross | 53,800 | 53,800 | ||||
Amortization expense | 53,800 | |||||
Accumulated amortization | 53,800 | 53,800 | 53,800 | |||
Noncompete Agreements [Member] | ||||||
Finite lived intangible asset gross | $ 26,300 | 26,300 | ||||
Intangible estimated life | 5 years | |||||
Amortization expense | $ 1,315 | $ 1,315 | 3,945 | $ 3,945 | ||
Accumulated amortization | $ 9,205 | $ 9,205 | $ 5,260 |
2. Property and Equipment (June
2. Property and Equipment (June 2017) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property and equipment, gross | $ 161,703 | $ 158,994 | |
Accumulated depreciation and amortization | 29,314 | 17,914 | $ 289 |
Property and equipment, net | 132,389 | 141,080 | 6,639 |
Furniture and Fixtures [Member] | |||
Property and equipment, gross | $ 9,703 | $ 6,994 | 6,928 |
Estimated service lives | 5 years | 5 years | |
Internally Software Development [Member] | |||
Property and equipment, gross | $ 152,000 | $ 152,000 | $ 0 |
Estimated service lives | 10 years | 10 years |
2. Property and Equipment (Ju53
2. Property and Equipment (June 2017) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 3,800 | $ 3,800 | $ 11,400 | $ 11,400 | $ 17,625 | $ 289 |
3. Trademarks (June 2017) (Deta
3. Trademarks (June 2017) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Trademarks, beginning balance | $ 22,592 | $ 20,174 | $ 20,174 | |
Trademarks purchased at cost | 50 | 1,692 | 2,419 | $ 20,174 |
Trademarks, ending balance | 22,642 | 22,592 | 20,174 | |
Trademarks [Member] | ||||
Trademarks, beginning balance | 22,592 | $ 20,174 | 20,174 | 0 |
Trademarks purchased at cost | 50 | 2,418 | ||
Trademarks, ending balance | $ 22,642 | $ 22,592 | $ 20,174 |
4. Line of Credit (June 2017) (
4. Line of Credit (June 2017) (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Line of credit, amount outstanding | $ 18,481 | $ 19,732 | $ 0 |
Wells Fargo [Member] | |||
Line of credit maximum amount | $ 55,000 | $ 55,000 | |
Line of credit interest rate | 7.50% | 7.50% | |
Line of credit, amount outstanding | $ 18,481 | $ 19,732 |
5. Notes Payable (June 2017) (D
5. Notes Payable (June 2017) (Details Narrative) - USD ($) | 9 Months Ended | ||
Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 | |
Note payable, amount outstanding | $ 132,408 | $ 93,397 | $ 0 |
Huntington National Bank [Member] | |||
Line of credit maximum amount | $ 100,000 | ||
Debt periodic payment frequency | monthly | ||
Interest rate terms | Prime plus 1.25% | ||
Debt maturity date | Feb. 28, 2017 | ||
Note payable, amount outstanding | $ 92,498 | 93,397 | |
Small Business Financial Solutions [Member] | |||
Note payable, amount outstanding | 39,910 | $ 0 | |
Debt face value | $ 100,000 | ||
Debt issuance date | Oct. 28, 2016 |
6. Accrued Expenses (June 2017)
6. Accrued Expenses (June 2017) (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Payables and Accruals [Abstract] | |||
Accrued payroll | $ 45,627 | $ 44,327 | $ 35,778 |
Accrued operating expenses | 85,155 | 59,077 | 7,615 |
Deferred rent | 250 | 250 | 3,007 |
Total accrued expenses | $ 131,032 | $ 103,654 | $ 46,400 |
7. Income Taxes (June 2017) (De
7. Income Taxes (June 2017) (Details - Deferred taxes) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2015 |
Net non-current deferred tax assets: | |||
Net operating loss carry-forward | $ 1,336,430 | $ 924,304 | $ 330,359 |
Net non-current deferred tax liabilities: | |||
Intangible assets | 11,957 | 109,471 | 0 |
Net | 1,324,743 | 814,833 | 330,359 |
Less valuation allowance | (1,324,743) | (814,833) | (330,359) |
Net deferred taxes | $ 0 | $ 0 | $ 0 |
7. Income Taxes (June 2017) (59
7. Income Taxes (June 2017) (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||||||
Effective tax rate | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
8. Commitments, Contingencies60
8. Commitments, Contingencies and Concentrations (June 2017) (Details) - USD ($) | Jun. 30, 2017 | Sep. 30, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Future lease commitment, 2017 | $ 17,100 | |
Future lease commitment, 2018 | 68,400 | $ 68,400 |
Future lease commitment, 2019 | 5,700 | 5,700 |
Future lease commitment | $ 91,200 | $ 156,002 |
8. Commitments, Contingencies61
8. Commitments, Contingencies and Concentrations (June 2017) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||||||
Rent expense | $ 22,887 | $ 19,481 | $ 45,088 | $ 39,717 | $ 89,150 | $ 86,149 |
9. Business Acquisitions (June
9. Business Acquisitions (June 2017) (Details - Acquisitions) - USD ($) | 12 Months Ended | ||||
Sep. 30, 2016 | Jun. 30, 2017 | Oct. 02, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill | $ 1,094,702 | $ 1,094,702 | $ 662,967 | $ 0 | |
Tax Coach Software [Member] | |||||
Stock issued for acquisition, shares | 6,000,000 | ||||
Common stock issued in stock exchange | $ 1,500,020 | ||||
Additional paid in capital for the escrow agreement provision | 404,600 | ||||
Intangible assets acquired | $ 719,400 | ||||
Net assets acquired/ net liabilities assumed | 90,518 | ||||
Goodwill | 1,904,620 | ||||
Total assets acquired | 809,918 | ||||
Fair value of acquisition | $ 1,094,702 | ||||
Assets acquired: | |||||
Cash | 57,025 | ||||
Accounts receivable | 15,476 | ||||
Accounts receivable - other | 5,408 | ||||
Internally developed software | 152,000 | ||||
Total tangible assets | 229,909 | ||||
Liabilities assumed: | |||||
Accrued expenses | 69,485 | ||||
Line of credit | 69,906 | ||||
Total liabilities | 139,391 | ||||
Net acquired assets/liabilities | 90,518 | ||||
Tax Coach Software [Member] | Trade Names [Member] | |||||
Intangible assets acquired | 69,300 | ||||
Tax Coach Software [Member] | Customer Relationships [Member] | |||||
Intangible assets acquired | 44,900 | ||||
Tax Coach Software [Member] | Proprietary Content [Member] | |||||
Intangible assets acquired | 525,100 | ||||
Tax Coach Software [Member] | Prospect List [Member] | |||||
Intangible assets acquired | 53,800 | ||||
Tax Coach Software [Member] | Noncompete Agreements [Member] | |||||
Intangible assets acquired | $ 26,300 |
10. Stockholders' Equity (June
10. Stockholders' Equity (June 2017) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Proceeds from sale of common stock | $ 625,000 | $ 377,715 | $ 535,000 | $ 1,875,705 | ||
Stock issued for services, value | 100,000 | |||||
Consulting expense | $ 324,296 | $ 238,248 | $ 953,947 | $ 871,696 | 1,237,221 | $ 452,148 |
Common Stock | ||||||
Stock issued new, shares | 675,000 | 21,150,000 | ||||
Proceeds from sale of common stock | $ 625,000 | |||||
Private Placement [Member] | ||||||
Proceeds from private placement | $ 535,000 | $ 1,875,000 | ||||
Stock issued new, shares | 785,000 | 5,625,000 | ||||
3 individuals [Member] | ||||||
Proceeds from warrants | $ 500,000 | |||||
Warrants issued | 225,000 | |||||
Warrant exercise price | $ 1.25 | $ 1.25 | ||||
Founding Fathers [Member] | ||||||
Stock forfeited for acquisition, shares | 2,926,294 | |||||
FMW Media Works [Member] | ||||||
Stock issued for services, shares | 50,000 | |||||
Stock issued for services, value | $ 50,000 | |||||
Consulting expense | $ 3,500 |
11. Stock Option Plan (June 201
11. Stock Option Plan (June 2017) (Details) - Options [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Number of Options | |||||
Options outstanding, beginning balance | 2,269,946 | 2,232,346 | 2,200,346 | 1,500,996 | 0 |
Options granted | 19,800 | 37,600 | 32,000 | 1,024,400 | 1,520,196 |
Options exercised | 0 | 0 | |||
Options cancelled or expired | 37,600 | 325,050 | 19,200 | ||
Options outstanding, ending balance | 2,252,146 | 2,269,946 | 2,232,346 | 2,200,346 | 1,500,996 |
Options exercisable | 2,215,171 | 2,215,379 | 2,200,346 | 2,200,346 | 0 |
Value Of Shares Under Options | |||||
Options outstanding, beginning balance | $ 0 | $ 33,661 | $ 22,129 | $ 7,359 | |
Options granted | 11,532 | 19,677 | $ 7,649 | ||
Options exercised | |||||
Options cancelled or expired | 4,907 | 290 | |||
Options outstanding, ending balance | $ 0 | $ 0 | $ 33,661 | $ 22,129 | $ 7,359 |
Weighted average exercise price | |||||
Weighted average exercise price, options outstanding, beginning balance | $ 0.64 | $ .33 | |||
Weighted average exercise price, options granted | $ 1.19 | $ 1.19 | 1.94 | 1 | $ .33 |
Weighted average exercise price, options exercised | |||||
Weighted average exercise price, options cancelled or expired | 1.19 | 0.33 | .33 | ||
Weighted average exercise price, options outstanding, ending balance | 0.64 | $ .33 | |||
Weighted average exercise price, options exercisable | $ 0.65 | $ 0.64 | $ 0.64 | $ .64 | |
Weighted average remaining contractual life | |||||
Weighted average remaining contractual life, options granted | 116 months | 116 months | 114 months | 111 months | 119 months |
Weighted average remaining contractual life, options outstanding | 109 months | 119 months | |||
Weighted average remaining contractual life, options exercisable | 100 months | 100 months | 97 months | 109 months |
11. Stock Option Plan (June 265
11. Stock Option Plan (June 2017) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Sep. 30, 2016 | |
Share based compensation | $ 22,715 | |||
2015 Stock Option Plan [Member] | ||||
Shares authorized under the plan | 9,000,000 | 9,000,000 | 9,000,000 | |
Plan expiration date | Feb. 27, 2017 | |||
2016 Stock Option Plan [Member] | ||||
Shares authorized under the plan | 20,000,000 | 20,000,000 | ||
Plan expiration date | Nov. 22, 2026 | |||
Unamortized value of stock options granted | $ 0 | $ 0 | ||
Options granted | 19,800 | 32,000 | ||
Options cancelled or expired | 37,600 | |||
2016 Stock Option Plan [Member] | 3 months ended June 30, 2017 | ||||
Unamortized value of stock options granted | $ 0 | 0 | ||
2016 Stock Option Plan [Member] | 3 months ended December 31, 2016 | ||||
Unamortized value of stock options granted | $ 11,532 | $ 11,532 |
12. Related Party Transaction66
12. Related Party Transactions (June 2017) (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | |
Accounts receivable - related party | $ 4,506 | $ 4,506 | $ 4,506 | $ 29,326 | ||
Management fees | 50,000 | $ 50,000 | 153,000 | $ 163,333 | 213,333 | 155,657 |
General and admin expenses | 107,669 | 106,845 | 384,477 | 291,263 | 408,537 | 411,235 |
Professional fees | 324,296 | 238,248 | 953,947 | 871,696 | 1,237,221 | 452,148 |
Majority Stockholder [Member] | ||||||
Accounts receivable - related party | 4,506 | 4,506 | 4,506 | 2,059 | ||
Management fees | 50,000 | 50,000 | 153,000 | 163,333 | 213,333 | 155,657 |
Board member and Stockholder [Member] | ||||||
General and admin expenses | 0 | 15,000 | 9,000 | 40,000 | $ 49,000 | $ 9,020 |
Related Party [Member] | ||||||
Professional fees | $ 109,500 | $ 109,500 | $ 225,600 | $ 225,600 |